Answer:
$1,114,000 - total equity section
Balance sheet extract
common stock (120,000 units) $720,000
common stock share premium $240,000
preference shares (8 000 units) $80,000
preference share premium $36,000
Profit (net income) <u> $ 38,000</u>
$1,114,000
Explanation:
common stock account (100,000 + 20,000) x $6 par value = $720,000
common stock premium per unit is calculated $18 minus par value of $6 = $12. total premium is 12 x 20,000 units issued= $240,000
Preference shares account = (5000+3000) x $10 = $80,000
preference share premium (22 minus 10) = $12 per unit
total preference shares premium is $12 x 3000 issued units= $36,000
