A company issued 20,000 shares of its P70 par value ordinary share capital and 8,000 of its P80 par value preference share capital for a total amount of 1,800,000. At this date, the company’s ordinary share capital was selling P 80 per share and the preference share capital was selling for P100 per share. What amount of the proceeds should be allocated to the preference share capital?
Transcribed Image Text:37. A company issued 20,000 shares of its P70 par value ordinary share
2 points
capital and 8,000 of its P80 par value preference share capital for a total
amount of 1,800,000. At this date, the company's ordinary share capital
was selling P 80 per share and the preference share capital was selling for
P100 per share. What amount of the proceeds should be allocated to the
preference share capital?
O A. P 800,000
О В.Р640,000
С. Р 600,000
D. P 400,000
O E. answer not given
2:26 AM
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へ G )
12/19/2020
Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.
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