Lump Sum Issuance of Shares

question 117

Essay

Lump sum issuance of shares
Bertram Corp. is authorized to issue 15,000 no par value common shares and 5,000 no par value preferred shares. On January 16, 2020, the corporation sold 50 common shares and 75 preferred shares for a lump sum of $ 9,000. The common were selling at $ 50 and the preferred at $ 100.
Instructions
Using the relative fair value method, prepare the entry to record the sale for cash. Show calculations.

---

Definitions:

Subsidies

Financial contributions provided by governments to support businesses, reduce the prices of commodities, or encourage activities beneficial to the public interest.

Freedom To Farm Act

A law passed in 1996 in the United States designed to phase out certain agricultural subsidies and give farmers more planting flexibility.

Transition Payments

Payments made to individuals or companies to facilitate adjustment to a new economic condition or policy.

Price Supports

Government interventions or policies to maintain the price of a commodity at a certain level to protect producers from price fluctuations.