You are given the following information for Smashville, Inc. During the year, Sm
ID: 2772500 • Letter: Y
Question
You are given the following information for Smashville, Inc.
During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $15,000. Calculate the book value per share, earnings per share, and cash flow per share. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Cost of goods sold: $ 119,000 Investment income: $ 2,300 Net sales: $ 232,000 Operating expense: $ 40,000 Interest expense: $ 7,400 Dividends: $ 11,000 Tax rate: 40 %
Explanation / Answer
A)Total asset = cash +other asset + Fixed asset + investment + operating asset
= 21000 + 39000 + 126000 + 43000 + 45000
= $ 274,000
Total liabilities = current liabiliites +long term debt + other liabiliites
= 18000 + 25000+ 5000
= 48000
Net asset = total asset - total liabiliites
= 274,000 - 48,000
= $ 226,000
Book value per share = net asset / number of shares
= 226,000 / 17,000
= $ 13.29 per share
B)Earning per share = Net income /Number of shares
= 40740 / 17000
= $ 2.40 per share
**Income before tax =( sales +Investment income ) - [cost of goods sold +operating expense +interest expense)
=(232000+ 2300 ) - (119000+40000+7400)
= 234300 - 166400
= 67900
less:Tax ( 27160) [67900*.40]
Net income 40740
C)cash flow per share = net cash flow /number of shares
= (40740 net income + 15000 depreciation expense) / 17000
= 55740 / 17000
= $ 3.28 per share
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