Reference no: EM132807709
Problem 1: Which of the following is incorrect when computing for preference shareholders' equity?
a. The liquidation value, or in the absence thereof, the aggregate par value, is allocated to the preference shareholders' equity.
b. If the preference shares are cumulative, all dividends in arrears are allocated.
c. If the preference shares are noncumulative, only the current year dividend is allocated.
d. If there are no dividends in arrears, only one-year dividends are allocated to the preference shareholders' equity.
Boe Corporation's stockholders' equity at December 31, 2008 was as follows:
6% noncumulative preference shares, ?100 par (liquidation value ?105 per share) 1,000,000
Ordinary shares, ?100 par 3,000,000
Retained earnings 950,000
Preferred dividends have been paid up to December 31, 2008.
Problem 2: At December 31, 2008, Boe's book value per common share was
a.131.70
b.130.00
c.129.70
d.128.00
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