-What Is the Book Value Per Share for the Current

question 158

Multiple Choice

$\begin{array}{l}\text { Selected data for the MK Company follow: }\\\\\begin{array} {| l | r | r | } \hline & \text { Current Year } & \text { Prior Year } \\\hline \begin{array} { l } \text { Preferred Shares, 8\% Par } \\\text { Value } \$ 50\end{array} & \$ 250000 & \$ 250000 \\\hline \begin{array} { l } \text { Common Shares, Per Value } \\\$ 10\end{array} & \$ 500000 & \$ 500000 \\\hline \begin{array} { l } \text { Retained Earnings at End of } \\\text { Year }\end{array} & \$ 257000 & \$ 240000 \\\hline \begin{array} { l } \text { Net Income } \\\end{array} & \$ 102000 & \$ 90000\\\hline \begin{array} { l } \text { Dividends Paid on Preferred } \\\text { Shares }\end{array} & \$ 20000 & \$ 20000\\\hline \begin{array} { l } \text { Dividends Paid on Common } \\\text { Shares }\end{array} & \$ 65000 & \$ 60000 \\\hline \begin{array} { l } \text { Qouted Market Price per } \\\text { Common Share at Year End }\end{array} &\$25&\$20 \\\hline\end{array}\end{array}$
-What is the book value per share for the current year,rounded to the nearest cent?

• A) $15.14.
• B) $18.31.
• C) $20.14.
• D) $22.18.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense allocated to a fixed asset since it was put into use, reflecting its wear and tear over time.

Business Computer

A computer designed for business purposes, including processing data, managing information, and supporting business operations.

Double-Declining-Balance

A method of accelerated depreciation in which an asset’s book value is decreased at double the rate of its straight-line depreciation.

Sum-Of-The-Years'-Digits Depreciation

A depreciation method that results in a more accelerated write-off of an asset than straight-line depreciation, based on a sum of the years’ digits formula.