During 2014, BV Sold and Issued the Following Shares for $20,000

question 50

Multiple Choice

During 2014, BV sold and issued the following shares for $20,000 cash: Common shares, 600 shares (current market price per share, $23.50) . Preferred shares, 200 shares (no current market price available) ; original issue price, three
Years earlier, $22 per share.
The total issue price of $20,000 that should be apportioned to the preferred shares is:

• A)$4,000
• B)$8,000
• C)$4,400
• D)$5,900

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Definitions:

Acquisition Differential

The difference between the purchase price of a company and the fair value of its identifiable assets and liabilities.

Non-Controlling Interest

A portion of the equity in a subsidiary not owned by the parent company, typically shown separately in the consolidated financial statements.

Net Income

The total earnings of a company after deducting all expenses and taxes from revenue, indicating the company's profit.

Intercompany Profit

Profits that arise from transactions between companies under common control, which may need to be eliminated in consolidated financial statements.