Goldsmith Corporation has provided the following data: $\begin{array}{lcr}
&\text { Year 2 } &{\text { Year 1 }} \
\text { Common stock, \$3 par value.}&\$ 270,000 & \$ 270,000 \
\text {Retained earnings }&\$ 419,000 & \$ 400,000 \
\text {Total stockholders' equity. }&\$ 749,000 & \$ 730,000 \
\text {Total liabilities \& stockholders' equity }&\$ 1,291,000 & \$ 1,270,000
\end{array}$ The company's net income in Year 2 was $24,400. The company's book value per share at the end of Year 2 is closest to:
A)$8.32 per share
B)$4.66 per share
C)$14.34 per share
D)$0.27 per share

Question

Quizplus · Accepted Answer

The book value per share is calculated by dividing the total stockholders' equity by the number of shares outstanding. In this case, the number of shares outstanding is not given, so we cannot calculate the book value per share exactly. However, we can estimate the book value per share by dividing the total stockholders' equity by the number of shares authorized. In this case, the number of shares authorized is 90,000 shares (270,000 / $3). Therefore, the estimated book value per share is $749,000 / 90,000 = $8.32 per share.

Goldsmith Corporation Has Provided the Following Data The Company's Net Income in Year 2 Was $24,400