Norton Company Issues 4,000 Shares of Its $5 Par Value

question 107

Multiple Choice

Norton Company issues 4,000 shares of its $5 par value ordinary shares having a fair value of $25 per share and 6,000 shares of its $15 par value preference shares having a fair value of $20 per share for a lump sum of $192,000.What amount of the proceeds should be allocated to the preference shares?

• A)$172,000
• B)$120,000
• C)$104,727
• D)$90,000

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Definitions:

Sexual Reproduction

A biological process that creates a new organism by combining the genetic material of two organisms.

Streptococci

A genus of coccus (spherical) bacteria that usually forms chains; known for causing various infections in humans and animals.

Alpha Proteobacteria

A class of Proteobacteria that includes a variety of species, some of which are capable of photosynthesis or nitrogen fixation.

Gram-Negative Bacteria

Bacteria with cell walls consisting of a thin peptidoglycan layer and a thick outer membrane. Compare with gram-positive bacteria