A Company Had the Following Stockholders' Equity on January 1

question 169

Essay

A company had the following stockholders' equity on January 1:
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Common stock }-\$ 1 \text { par value; } 1,200,000 \text { shares authorized, } 400,000 \\\text { shares issued and outstanding }\end{array} & \$ 400,000 \\\hline \text { Contributed capital in excess of par value, common stock } & 300,000 \\\hline \text { Retained earnings } & \$ 1,064,000 \\\hline \text { Total stockholders' equity } & \$ 364,000 \\\hline\end{array}$

On January 10,the company declared a 40% stock dividend to holders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

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Definitions:

Contract Voidable

A contract that is valid but may be declared void at the option of one of the parties to the contract.

Non Est Factum

A legal defense claiming that a signed agreement is invalid because the signer was unaware of its true nature due to a significant mistake or misrepresentation.

Extended Warranty

An additional warranty that covers the repair or replacement of items beyond the standard warranty period.

Chequing Account

A bank account from which money can be quickly withdrawn using checks, debit cards, or electronic methods.