at the begining of the current year, king cole, inc. had 300,000 shares of capit

Question

at the begining of the current year, king cole, inc. had 300,000 shares of capital stockputstanding and total stockholders equity of $1,200,000. During the year the company earned net income of $325,000, declared cash dividends of $150,000, distributed a 5% stock dividend of 15,000 shares when the market price of the stock was $16 per share, and purchased 3,000 shares of treasurey stock at a cost of $13 per share. Compute th following: A. total stockholders equity? B. Number of shares of stock outstanding? C. book value per share?

Explanation / Answer

total stockholders equity = Share capital+retained earnings-Treasury shares =$1,200,000 + 15,000 ($16) - 3,000 shares ($13) = $1401000 Number of shares of stock outstanding = 300000 + 15000 - 3000 = 312000 shares book value per share = $1401000/312000 = $4.4904 per share

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