Question

The following data are provided:

	December 31,
	2021		2020
5% Cumulative preferred stock, $50 par	$105000		$105000
Common stock, $10 par	130000		93000
Additional paid-in capital	78000		72000
Retained earnings (includes current year net income)	255000		214000
Net income	50000

Additional information:
On May 1, 2021, 5200 shares of common stock were issued. The preferred dividends were not declared during 2021. The market price of the common stock was $50 at December 31, 2021.

The book value per share of common stock at 12/31/21 is calculated as

385 ÷ 13.

208 ÷ 13.

458 ÷ 13.

463 ÷ 13.

Answer 1

The book value per share of common stock at 12/31/21 is calculated as

458 ÷ 13.

		000
	Common Stock($10 par value, 13000 Shares Authorised, Issued and outstanding)	$               130
	Paid-in Capital in excess of Par of common stock	$                 78
	Cumulative Preferred 5% Stock ($50 par value, 21,000 Shares authorised, Issued and outstanding)	$               105
	Total Paid-in Capital	$               313
	Retained earnings	$               255
	Total Shareholder's Equity	$               568
	Less: Preferred Stock	$             (105)
	Less: Arrear Preferred Dividend(105,000*5%)	$                 (5)
	Book Value	$               458
	No.of Common stock	13
	Book Value per share(458/13)	$           35.21
	*Book Value per share= (Total Shareholder's Equity- Preferred stock- Arrear Preference dividend)/No. of common stock outstanding
	Please do upvote if you found the answer useful.
	Feel free reach in the comment section in case of any clarification or queries.