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Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.

Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.
Transcribed Image Text:Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.
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