The following account balances have been provided for the end of the most recent year: $\begin{array} { l r }
\text { Total Assets } & \$ 150,000 \
\text { Total Shareholders" Equity } & \$ 120,000 \
\text { Total Common Shares } & \$ 50,000 ( 5,000 \text { shares) } \
\text { Total Preferred Shares } & \$ 10,000 ( 1,000 \text { shares) }
\end{array}$ What is the book value per common share?

Question

The following account balances have been provided for the end of the most recent year: $\begin{array} { l r } 
\text { Total Assets } & \$ 150,000 \
\text { Total Shareholders" Equity } & \$ 120,000 \
\text { Total Common Shares } & \$ 50,000 ( 5,000 \text { shares) } \
\text { Total Preferred Shares } & \$ 10,000 ( 1,000 \text { shares) }
\end{array}$ What is the book value per common share?

Quizplus · Accepted Answer

The book value per common share is calculated as follows:

Book Value Per Common Share = (Total Shareholders' Equity - Total Preferred Shares) / Total Common Shares

Book Value Per Common Share = ($120,000 - $10,000) / 5,000

Book Value Per Common Share = $22

Therefore, the answer is choice B, $22.

The Following Account Balances Have Been Provided for the End