Determining the book value per share. Show below is information relating to the
ID: 2437355 • Letter: D
Question
Determining the book value per share. Show below is information relating to the shareholders' equity of Churchill Limited
6% non-cumulative preference share, $100 par $1,200,000
Ordinary share, $10 par 1,000,000 shares authorized $3,000,000
SHare premium, ordinary shares $6,000,000
Deficit (negative retained earning) $1,200,000
From the above information, compute the following:
(a) Number of preference shares issued and outstanding
(b) Average issue price per share of ordinary shares
(c) Issued and fully paid capital
(d) Total amount in shareholders' equity section
Explanation / Answer
a) Number of preference share issued and outstanding = 1200000/100 = 12000 Shares
b) Average issue price of ordinary shares = (3000000+6000000)/300000 = 30 per share
c) Issued and fully paid capital = 9000000+1200000 = 10200000
d) Total amount in shareholder's equity = 10200000-1200000 = 9000000
Book value per sharee of preference share = 100 per share
Book value per share of ordinary shares = 9000000-1200000/300000 = 26 per share
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