New York Corporation has the following shareholders' equity on December 31, 2021: Shareholders' equity
Share capital
$ 10 convertible preferred shares,
10,000 shares authorized, 5,000 shares issued $ 0,570,000
Common shares, no par value,
200,000 shares authorized, 90,000 shares issued 1,800,000
Total share capital 2,370,000
Retained earnings 450,000
Total shareholders' equity $ 2,820,000
If one preferred share is convertible into 10 common shares, how many common shares are issued when 500 preferred shares are converted?
A) 500
B) 50
C) 5,000
D) 5

Question

Quizplus · Accepted Answer

When 500 preferred shares are converted, each preferred share converts into 10 common shares, resulting in 500 x 10 = 5,000 common shares being issued.

New York Corporation Has the Following Shareholders' Equity on December