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At December 31,2016, Falcon Ltd. had the following items in shareholders' equity: Preferred shares, Class...

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Accounting

At December 31,2016, Falcon Ltd. had the following items in shareholders' equity: Preferred shares, Class A, nonvoting, cumulative, par $10, $2 dividend per share, 100,000 authorized, 50,000 issued.
Preferred shares, Class B, voting, cumulative, par $15,$3
$500,000 dividend per share, convertible at the rate of one preferred share to five common shares; 200,000 authorized, 80,000 issued
Common shares, voting; 1,000,000 authorized, 600,000 issued
Retained earnings (deficit).
[1,200,000],[5,357,000],[(2,394,000)],[4,663,000]
At December 31,2016 the following were disclosed in notes or other parts of the balance sheet:
There were two common share stock options outstanding:
$15 per share exercise price and 50,000 shares, currently exercisable
$17 per share exercise price and 120,000 shares, able to be exercised after January 1,2017
During 2017, the following occurred:
Net income was $1,100,000.
80,000 common shares were issued on March 1,2017 for $23 per share.
The tax rate was 40%
No dividends were declared or paid to any of the shareholders.
The average market price of Falcon's shares during 2017 was $20.
Required:
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