At December 31, 2012, Albrecht Corporation had outstanding 373,000 shares of com

Question

At December 31, 2012, Albrecht Corporation had outstanding 373,000 shares of common stock and 8,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2013, Albrecht sold for cash 12,000 shares of its common stock. No cash dividends were declared for 2013. For the year ended December 31, 2013, Albrecht reported a net loss of $114,000.

Calculate Albrecht's net loss per share for the year ended December 31, 2013.

At December 31, 2012, Albrecht Corporation had outstanding 373,000 shares of common stock and 8,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2013, Albrecht sold for cash 12,000 shares of its common stock. No cash dividends were declared for 2013. For the year ended December 31, 2013, Albrecht reported a net loss of $114,000.

Explanation / Answer

Stock Position of the Company:

373000 Share of Common Stock

8000, 9.5% Preferred Stock @ par value of $100

Note: No dividend has been declared means no dividend was declared for common stock, since dividend in preferred stock has to be paid compulsorily.

Hence on 8000 Shares total dividend paid = 8000 x 100 x9.5/100 = 76,000

Net loss will be:-

Loss on sale of common stock+ dividend paid for preference stock

Loss on sale of common stock + 76000 = 114000

Net Loss on sale of common stock = 114000

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