Information on shareholder\'s equity as currently shown on the books of the bark
ID: 2634542 • Letter: I
Question
Information on shareholder's equity as currently shown on the books of the barks Corporation is given as:
Common Shares (2.00 par value ) 350,000
Capital in excess of par 0
Retained Earnings 7,800,000
Rework the shareholder's equity as it appears on the books if the company issues 40,000 new shares of common at $70 per share.
Information on shareholder's equity as currently shown on the books of the barks Corporation is given as:
Common Shares (2.00 par value ) 350,000
Capital in excess of par 0
Retained Earnings 7,800,000
Rework the shareholder's equity as it appears on the books if the company issues 40,000 new shares of common at $70 per share.
Explanation / Answer
Book value per share = Shareholder's equity / Number of shares outstanding
Shareholder's Equity =
Common Shares (350,000x2) = $700,000
Add: Retained Earnings = $7,8000,000
Add: Additional issue (40,000x70) = $ 2,800,000
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Shareholder's Equity = $81,500,000
Total Shares outstanding = 350,000 + 40,000 = 390,000
Book Value per share = $81,500,000 / 390,000 = $208.97