Whispering Inc. began operations in January 2023 and reported the following results for each of its 3 years of operations. 2023 $241,000 net loss 37,000 net loss 2025 809,000 net income 2024 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 $ Book value per share .67 $540,000 $781,000 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.) .65
Whispering Inc. began operations in January 2023 and reported the following results for each of its 3 years of operations. 2023 $241,000 net loss 37,000 net loss 2025 809,000 net income 2024 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 $ Book value per share .67 $540,000 $781,000 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.) .65
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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