73% Thu 10:43 A , AccountingueopardyFinaExa.. Design Transitions Animations Slid

Question

73% Thu 10:43 A , AccountingueopardyFinaExa.. Design Transitions Animations Slide Show Review View Times New Roman · 20 , A. A. A) BIU abe X2 X2i.A'A' Paragraph 1.1 Insert Drawing Slides VARIOUS ACCOUNTING TOPICS 200 Goldsmith Corp, has provided the following data: Description Common Stock, $3 Par S 270,000 S 270,000 Retained Earnings Total Stockholder's Equity 749,000 730,000 Total Liabilities and S/E 1,291,000 1,270,000 Goldsmith's net income in Year 2 was $24,400. Company's book value per share at the end of Year 2 is: Year 2 Year 1 419,000 400,000 Comnpany's ee are at the end of Year 214 A: What is $8.32 (749K90,000 sheres outstanding *270,000 S3 per share-90,000 shares) ick to add notes Notes Comments :: . 78%

Explanation / Answer

Answer: $ 8.32 represents Book Value per share of the Common Stock. Investors and stock owners use book value per share of common stock to measure how much money their shares are worth on the books after all debt is paid off. This amount represents the residual amount which goes to common shareholders, if a company disbands and liquidate its assets and uses the assets to pay of its liabilities. It is the amount that shareholders would receive if company dissolves and realises cash equal to the book value of its assets and pays liabilities at their book value.

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