Splish Inc. began operations in January 2015 and reported the following results for each of its...

Splish Inc. began operations in January 2015 and reported the following results for each of its 3 years of operations. 2015 $284,000 net loss 2016 $40,000 net loss 2017 $869,000 net income At December 31, 2017, Splish Inc. capital accounts were as follows. 7% cumulative preferred stock, par value $100; authorized, issued, and outstanding 5,100 shares $510,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 721,000 shares $721,000 Splish Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Splish began operations. The state law permits dividends only from retained earnings. (a) Compute the book value of the common stock at December 31, 2017. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share $ Entry field with correct answer (b) Compute the book value of the common stock at December 31, 2017, assuming that the preferred stock has a liquidating value of $108 per share. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share $

I have part A calculated correclty, but my calculation of 1.50 for part B book value is not correct. Help please

Expert Solution

Total Retained earnings : -284000 loss + (-40000)loss + 869000 income

= -284000-40000 +869000

= $ 545000

Total stockholders equity : Common stock +preferred stock +retained earnings

= 721000+510000 + 545000

= $ 1776000

common stock per share =[Total stockholders equity -preferred stock liqudity value ]/number of common shares outstanding

=[ 1,776,000- (5100*108)]/721000

= 1,776,000- 550,800]/721000

= 1,225,200/721000

= $ 1.70 per share

ekkarill92 answered 2 years ago

Nash Inc. began operations in January 2015 and reported the following results for each of its...

Nash Inc. began operations in January 2015 and reported the following results for each of its 3 years of operations. 2015 $ 260,000 net loss 2016 $ 37,000 net loss 2017 $ 819,000 net income At December 31, 2017, Nash Inc. capital accounts were as follows. 7% cumulative preferred stock, par value $100; authorized, issued, and outstanding 4,700 shares $ 470,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 818,000 shares $ 818,000 Nash Inc. has never...

B Inc. began operations in January 2018 and reported the following results for each of its...

B Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $278,000 net loss 2019 $43,000 net loss 2020 $866,000 net income At December 31, 2020, B Inc. capital accounts were as follows. 7% cumulative preferred stock, par value $100; authorized, issued, and outstanding 4,700 shares $470,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 680,000 shares $680,000 B Inc. has never paid a cash or stock...

Ayayai Inc. began operations in January 2018 and reported the following results for each of its...

Ayayai Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $246,000 net loss 2019 $38,000 net loss 2020 $835,000 net income At December 31, 2020, Ayayai Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 5,400 shares $540,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 693,000 shares $693,000 Ayayai Inc. has never paid a cash or stock...

Marigold Inc. began operations in January 2018 and reported the following results for each of its...

Marigold Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $268,000 net loss 2019 $38,000 net loss 2020 $775,000 net income At December 31, 2020, Marigold Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 4,500 shares $450,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 741,000 shares $741,000 Marigold Inc. has never paid a cash or stock...

Exercise 15-24 Johnstone Inc. began operations in January 2014 and reported the following results for each...

Exercise 15-24 Johnstone Inc. began operations in January 2014 and reported the following results for each of its 3 years of operations. 2014 $260,000 net loss 2015 $40,000 net loss 2016 $700,000 net income At December 31, 2016, Johnstone Inc. share capital accounts were as follows. Share Capital—Preference, 6% cumulative, par value $100; authorized, issued, and outstanding 5,000 shares $500,000 Share Capital—Ordinary, par value $1.00; authorized 1,000,000 shares; issued and outstanding 750,000 shares $750,000 Johnstone Inc. has never...

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2015. Its cost and...

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2015. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 35 per unit Direct labor $ 55 per unit Overhead costs for the year Variable overhead $ 4,200,000 Fixed overhead $ 6,300,000 Selling and administrative costs for the year Variable $ 800,000 Fixed $ 4,500,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit...

Current Attempt in Progress Splish Brothers Inc. reported the following information for 2017. Splish Brothers Inc....

Current Attempt in Progress Splish Brothers Inc. reported the following information for 2017. Splish Brothers Inc. Comparative Balance Sheets December 31 Assets 2017 2016 Change Increase/Decrease Cash $55,490 $35,760 $19,730 Increase Accounts receivable 61,640 21,790 39,850 Increase Inventory 43,890 –0– 43,890 Increase Prepaid expenses 6,050 3,970 2,080 Increase Land 54,910 69,520 14,610 Decrease Buildings 198,520 198,520 –0– Accumulated depreciation—buildings (20,880 ) (13,920 ) 6,960 Increase Equipment 182,980 67,590 115,390 Increase Accumulated depreciation—equipment (28,090 ) (9,910 ) 18,180 Increase Totals $554,510...

Navaroli Company began operations on January 5, 2015. Cost and sales information for its first two...

Navaroli Company began operations on January 5, 2015. Cost and sales information for its first two calendar years of operations are summarized below. Manufacturing Costs: Direct materials $80 per unit Direct labor $120 per unit Factory overhead costs: Variable overhead $30 per unit Fixed overhead $14,000,000 Nonmanufacturing costs Variable selling and administrative $10 per unit Fixed selling and administrative $8,000,000 Production and sales data 2015 2016 Units produced 200,000 units 80,000 Units sold 140,000 140,000 Units in ending inventory 60,000...

Liang Company began operations on January 1, 2015. During its first two years, the company completed...

Liang Company began operations on January 1, 2015. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. 2015 Sold $1,350,300 of merchandise (that had cost $975,800) on credit, terms n/30. Wrote off $19,300 of uncollectible accounts receivable. Received $671,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.10% of accounts receivable will...

Hot Weelz Ltd., which began operations in January 2015, follows IFRS and is subject to a...

Hot Weelz Ltd., which began operations in January 2015, follows IFRS and is subject to a 30% income tax rate. In 2018, the following events took place: a) The company switched from the zero-profit method to the percentage-of-completion method of accounting for its long-term construction projects. This change was a result of experience with the project and improved ability to estimate the costs to completion and therefore the percentage complete. b) Due to a change in maintenance policy, the estimated...

Question