Answer:
The correct answer for option (a) is shown below, and for option (b) is $2,325,000
Explanation:
According to the scenario, the computation of the given data are as follows:
(a).
Jan 29 Cash A/c Dr. $1,725,000 (75,000 × $23)
To, Common stock A/c. $750,000 ( 75,000 × $10)
To Share in excess of par value A/c $975,000 ( 75,000 × $23-$10)
May 31 Cash A/c Dr. $600,000 ( 100,000 × $6)
To, Preferred stock A/c $400,000 ( 100,000 × $4)
To, Preferred stock in excess of par value A/c $200,000 ( 100,000 × $6 - $4)
(b). Total amount invested = $1,725,000 + $600,000
= $2,325,000
