FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Whispering Inc. began operations in January 2023 and reported the following results for each of its 3 years of operations.
2023 $241,000
2024
net loss
37,000 net loss
809,000 net income
2025
At December 31, 2025, Whispering Inc. capital accounts were as follows.
8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 5,400 shares
Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 781,000 shares
Whispering Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Whispering began
operations. The state law permits dividends only from retained earnings.
a. Compute the book value of the common stock at December 31, 2025. (Round answers to 2 decimal places, e.g. 38.50.)
Book value per share $
+A
.67
b. Compute the book value of the common stock at December 31, 2025, assuming that the preferred stock has a liquidating value of
$107 per share. (Round answers to 2 decimal places, e.g. 38.50.)
Book value per share $
$540,000
$781,000
.65
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