Exercise 3 (T - 5 marks) The following items were shown on the balance sheet of McKean Corporation on December 31, 2014:

Shareholders' Equity

Share Capital

Common shares, no par value, unlimited number of shares authorized; shares issued $1,200,000

$2 preferred shares, redeemable at $120, cumulative,

20,000 shares authorized, 6,000 shares issued 120,000

Total share capital 1,320,000

Retained Earnings 500,000

Total shareholders' equity $1,820,000

Instructions Complete the following statements and show your calculations. All of the common shares were issued at $5 per share.

a. The number of common shares issued was _______________.

b. The preferred shares dividend was $____________ per share.

c. It would cost the company $____________ to redeem 1,000 preferred shares.

d. The average issue price of the preferred shares was $_____________.

e. The total amount of cash and other assets paid to McKean Corporation in exchange for share capital, at December 31, 2014 was $______________.