Berlin Corporation Was Organized on January 1, 2020, with 400,000

question 140

Multiple Choice

Berlin Corporation was organized on January 1, 2020, with 400,000 no par value common shares authorized. During 2020, the corporation had the following share transactions: Jan 5 Issued 150,000 shares at $ 10 per share
Apr 6 Issued 50,000 shares at $ 12 per share
Jun 8 Issued 50,000 shares at $ 14 per share
Jul 28 Purchased 20,000 shares at $ 11 per share and cancelled them
Dec 31 Issued 20,000 shares at $ 18 per share
What is the total amount of contributed surplus at December 31, 2020?

• A) $ 0
• B) $ 4,000
• C) $ 20,000
• D) $ 220,000

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Definitions:

Allocation Mechanism

The process or system used to determine how resources are distributed and goods and services are allocated in an economy.

Incentive Function

A principle or mechanism designed to motivate individuals or entities to act in a desired manner by offering rewards or consequences.

Productive Resource

Any resource used in the creation of goods and services, including land, labor, and capital.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in market balance.