question archive Diamondback, Inc
Diamondback, Inc
Subject:AccountingPrice:2.88 Bought3
Diamondback, Inc., has the following stockholders’ equity:
Preferred stock, 1%, $12 par,
40,000 shares authorized and issued...................................... $ 480,000
Common stock, $8 par, 100,000 shares authorized,
67,000 shares issued................................................................. 536,000
Additional paid-in capital—Common....................................... 2,140,000
Retained earnings...................................................................... 1,800,000
Less treasury stock, common (1,200 shares at cost).................. (49,000)
Total stockholders’ equity........................................................ $4,907,000
The company has passed its preferred dividends for three years, including the current year. Compute the book value per share of the company’s common stock. Refer to the “real-world format” for reporting stockholders’ equity in Exhibit 10-10 (p. 579) as an example in making your computations.
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Total stockholders' equity |
$4,907,000 |
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Less: Preferred stock |
(480,000) |
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Preferred dividends in arrears |
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(40,000 × .01 × $12 x 3) |
(14,400) |
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Common equity |
$4,412,600 |
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Number of common shares outstanding |
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(67,000 − 1,200) |
÷65,800 |
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Book value per share of common stock |
$67.06 |
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