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Compute the book value per share of the preferred shares

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Reference no: EM132931155

Presented below are the accounts and related balances for ECOM Finance Ltd, at September 30, 2020.

Salary Payables $3000

Cash 15000

Accounts Payable 20000

Retained Earnings 80000

Organization Costs, net 1000

Long-term Notes Payable 70000

Common Shares, 60,000 shares authorized, 25,000 shares issued 95000

Inventory 85000

Property, Plant and Equipment, net 204,000

Accounts Receivable, net 25000

Income Tax Payable 12000

Preferred Shares, $6.00, cumulative, 20000 shares authorized, 3000 shares issued 50000

Required:

Problem a. Prepared the classified balance sheet at September 30, 2020. Use the account format for the balance sheet.

Problem b. Are the preferred shares cumulative or noncumulative?

Problem c. What is the total amount of the annual preferred dividend?

Problem d. Assume the common shares were all issued at the same time. What was the selling price per share?

Problem e. Compute the book value per share of the preferred shares and the common shares. No prior-year preferred dividends are in arrears, and ECOM Finance Ltd. has not declared the current-year dividend.

Reference no: EM132931155

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