Quiz: Chapter 7 This Question: 1 p 5 of 10 (6 complete) This Data Table Book and
ID: 2615985 • Letter: Q
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Quiz: Chapter 7 This Question: 1 p 5 of 10 (6 complete) This Data Table Book and bondation value The balance sheet tor Galinas industries as flows. 1. Preferred stock can be siquidated at book value 2. Accounts receivable and inventories can 3 The firm has 4 All interest and dividends are curently paid up 5 Land and blings can be iquidated at 115% of book vate 6 Machnery and oquement can be lqudated at 69% of book value be buidated at 85% of book value Gallinas Industries Balance Sheet December 3 10.000 shares of common stock outstanding Lisbilities and Stockholders' Equity Assets Cash Marketable securites Accounts receivable 50.000 47,520 95.040 30 680 5 323 240 5 101535 169 225 s 270,760 594 000 Cash and marketable securties can be liquidated at book value Given this information answer the foliowing a. What is Galinas Industries book value per share? Accounts payable Notes payable Accnued wages 71,200 41.580 41.580 154 440 s 106,920 Total cument labites Long-berm debt Preferred sock Commion stook (10,000 shres Retained eaming Total abies and stockholders equity b. What is its liquidaon value per share? a. Galinas Industries' book value per share s sRound to the nearest cent b. Galinas Industnes iquidation value per share iRound to the nearest cent) Total curent nseti Land and buildings (net Machinery and equpment 71.200 172 260 9 100 594 000 Total xed assets (net) Compare, contrast, and discuss the values found in parts a and b (Select the best ans Total aspet A. Liquidation value is below book value per share and represents the minimum value B. Liquidation vaue is below boox vau·per shar. and represents to manum value Print Done Liqudaton value in greater than book vatue er share and represents the minimum D. Liqudation value is below book value per share and represents the maimum value fop Cick to select your answerts Type here to searchExplanation / Answer
a. Book value per Share = Value as per books
=(Common Stock+Retained Earnings) /Number of shares
=(172,260+89100)/10,000
=$26.136
or $26.14
b. Liquidation value per share = Value realised on Liquidation
(Cash = 50,000+Marketable Securities 47520+Accounts Receivables 80784+Inventories 111078+Land And Buldings 116765.25+Machinery and Equipment 116765.25-Accounts payable 71280-Notes payable 41580-Accrued Wages 41580-Long term debt 106920-Preferred Stock 71280)/10,000
=$19.03
c. Liquidation value is below book value
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