A corporation reports the following year-end stockholders' equity: Paid-in capital:? Preferred stock, 8%, 100,000 shares authorized, 50,000 shares issued …………………. $ 2,500,000 Common stock, $1 par, 5,000,000 shares authorized, 4,000,000 shares issued ………………..4,000,000 Paid-in capital in excess of par, Common …………..1,325,000 Total paid-in capital ………………………………..$ 7,825,000Retained earnings ……………………………………..10,675,000Total stockholders' equity …………………………….$18,500,000Determine the following:(1) Par value for the preferred stock.(2) Book value per share for common stock
What will be an ideal response?
(1) Preferred stock par value = $2,500,000/50,000 shares = $50
(2) Book values per share:
Total stockholders' equity ……………………… | $18,500,000 |
| Less preferred stockholders' equity ? | 2,500,000 |
| Common stockholders' equity ………………….. | $16,000,000 |
| ? | ? |
| Book value per share of common stock ($16,000,000/4,000,000 shares)…………….. | $4 |
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