Hello dear, Can I get the answers explain in each step Intermediate Accounting I
ID: 2341527 • Letter: H
Question
Hello dear,Can I get the answers explain in each step
Intermediate Accounting II Book Value Problem - 5-lo o Name: Rounding Guidelines Book Value per share answers: 2 decimals PART I: The stockholders' equity section from a corporation's balance sheet appeared as follows: Stockholders' Equity Preferred Stock. 6% cumulative. S 100 par, authorized and Common Stock. $10 par. 15.000 shares authorized and Retained Earnings issued 10,000 shares issued Total stockholders' equity $1.000,000 50.000 1.185,000 Required: Compute the book value per share tor common stock under each of the following assumptions. Show your organized computations on attached paper Book Value Per share Common Assumptions . There are no dividends in arrears on the preterred stock 2. One year's dividends are in arrears on the pref. stock 3.Four year's dividends are in arrears on the pret. stock. 4. Two year's dividends are in arrears and the preferred stock is callable at S110 per share io
Explanation / Answer
Book value per share for common stock = Total stockholder's equity - (preferred stock + dividend in arrears) / no. of shares of common stock outstanding
Answer 1 - There are no dividend in arrears on the preferred stock
Book value per share for common stock = (1,185,000 - (1,000,000)) / 15000 = $12.33 per share
Answer 2 - One year's dividend in arrears on the preferred stock
Dividend in arrears = 6% on $1,000,000 = 60,000
Book value per share for common stock = (1,185,000 - (1,000,000+60,000)) / 15000 = $8.33 per share
Answer 3 - Four year's dividend in arrears on the preferred stock
Dividend in arrears = 6% on $1,000,000 = 60,000 per year
Dividend in arrears for four years = $240,000
Book value per share for common stock = (1,185,000 - (1,000,000+240,000)) / 15000 = -$3.67 per share
Answer 4 - Two year's dividend in arrears on the preferred stock and preferred stock is callable at $110 per share
Dividend in arrears = 6% on $1,100,000 = 66,000 per year
Dividend in arrears for two years = $132,000
Book value per share for common stock = (1,185,000 - (1,000,000+132,000)) / 15000 = -$3.53 per share
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.