The following information is necessary to compute the net assets (stockholders\'
ID: 2346346 • Letter: T
Question
The following information is necessary to compute the net assets (stockholders' equity) and book value per share of common stock for Rothchild Corporation:
8% Cumulative preferred stock $100 par - $200,000
Common Stock, $5 par, autho $100,000 shares issues 60,000 shares - $300,000
Addt paid in capital- $ 452,800
Deficit (negative in retained earnings)- $ 146,800
Dividends in arrears on preferred stock, 1 full year- $16,000
A. Compute the amount of net assets (stockholders' equity).
Amount of net assets ?
B. Compute the book value per share of common stock.
Book value per share?
Explanation / Answer
A. 8% Cumulative preferred stock $100 par - $200,000 Common Stock, $5 par, autho $100,000 shares issues 60,000 shares - $300,000 Addt paid in capital- $ 452,800 Deficit (negative in retained earnings)- $ 146,800 Dividends in arrears on preferred stock, 1 full year- $16,000 Therefore, Stockholder's equity = $200,000 + $300,000 + $ 452,800 - $ 146,800 - $16,000 = $790,000 B. the book value per share of common stock = (Total Shareholder equity - preferred stock)/Total number of outstanding shares = $790,000 - $200,000 /60000 = $12.83
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