The following information is from the balance sheet of Scott Corporation as of December 31, 2010.
$$\begin{array} { | l | r | r | }
\hline \text { Preferred stock, cumulative, } 10 \% , \$ 100 \text { par } & & \$ 100,000 \
\hline \text { Common stock, } \$ 50 \text { par } & 200,000 & \
\hline \text { Paid-in capital in excess of par - common } & & 200,000 \
\hline \text { Retained earnings } & \underline { 100,000 } & \
\hline \text { Total stockholders' equity } & \$ \underline { 600,000 } & \
\hline
\end{array}$$ The corporation did not declare a dividend in 2008 or 2009. There were no dividends in arrears before 2008. Which of the following is the book value per share for preferred stock and common stock?

Question

The following information is from the balance sheet of Scott Corporation as of December 31, 2010.
$$\begin{array} { | l | r | r | } 
\hline \text { Preferred stock, cumulative, } 10 \% , \$ 100 \text { par } & & \$ 100,000 \
\hline \text { Common stock, } \$ 50 \text { par } & 200,000 & \
\hline \text { Paid-in capital in excess of par - common } & & 200,000 \
\hline \text { Retained earnings } & \underline { 100,000 } & \
\hline \text { Total stockholders' equity } & \$ \underline { 600,000 } & \
\hline
\end{array}$$ The corporation did not declare a dividend in 2008 or 2009. There were no dividends in arrears before 2008. Which of the following is the book value per share for preferred stock and common stock?

Quizplus · Accepted Answer

The book value per share for preferred stock is $100,000 / 1,000 shares = $100 per share. The book value per share for common stock is ($600,000 - $100,000) / 2,000 shares = $250 per share.

The Following Information Is from the Balance Sheet of Scott