Analyzing the stockholders’ equity section of the balance sheet
The balance sheet of Buzzcraft, Inc., reported the following:
|
Preferred stock, $7 par, 5%, |
|
|
1,000 shares authorized and issued |
$ 7,000 |
|
Common stock, $1.50 par value, 43,000 shares authorized; 11,000 shares issued |
16,500 |
|
Paid-in capital in excess of par—common |
224,000 |
|
Total paid-in capital |
247,500 |
|
Retained earnings |
80,000 |
|
Total stockholders’ equity |
$ 327,500 |
Preferred dividends are in arrears for two years, including the current year. On the balance sheet date, the market value of the Buzzcraft common stock was $28 per share.
Requirements
1.Is the preferred stock cumulative or noncumulative? How can you tell?
2.What is the total paid-in capital of the company?
3.What was the total market value of the common stock?
4.Compute the book value per share of the common stock.