Reference no: EM133188536
Question - On December 31, 2001, Dorsey Company reports the following amounts:
Preferred shares $1,100,000
Common shares 3,900,000
Retained earnings 1,780,000
The preferred shares are $7, no par value, cumulative and issued at $50 per share. One million common shares, issued at $39 per share, are issued.
Required - Calculate the book value per common share for each of the following assumptions:
(a) There are no preferred dividends in arrears.
(b) Preferred dividends are two years in arrears.