On incorporation of X Ltd. 1,000 common shares were issued to Anne for $1,000. At the beginning of Year 2, 800 common shares of X Ltd. were issued to Bill for $8,000, the fair market value of the shares on that date. At the end of Year 3, 500 Class A preferred shares of X Ltd. were issued to Carl for $7,000, the fair market value of the preference shares on that date. Income tax reference: ITA 89(1) (definition of paid-up capital), 54 (definition of adjusted cost base).
At the end of Year 3, determine the following:
a) The paid-up capital (PUC) of the common shares and the preference shares of X Ltd.
b) The PUC and adjusted cost base of the shares of X Ltd. owned by each of Anne, Bill and Carl.