AYorkshire Corporation Has 9,000 Shares of $10 Par Value Common

question 164

Essay

a.Yorkshire Corporation has 9,000 shares of $10 par value common stock and 5,000 shares of $50 par value,10 percent cumulative preferred stock outstanding.All shares were issued at par value.In addition,retained earnings total $90,000.If the preferred stock is callable at $54 per share,and one year's dividends are in arrears,compute book value per share of preferred stock.
b.Assume the same facts as in a above.Calculate book value per share of common stock.
c.Assume the same facts as in a above and that Yorkshire Corporation declares a 5-for-1 stock split on its common stock.After the split,total par value of common stock equals what amount?
d.Assume the same facts as in a above and that Yorkshire Corporation declares a 12 percent stock dividend on its preferred stock.If the market value on the declaration date was $70 per share,for what amount will Preferred Stock Distributable be credited?

---

Definitions:

Salesperson Commissions

are the payments made to sales staff based on the value or volume of sales they have made.

Prime Costs

The direct costs of manufacturing a product, which include raw material and labor expenses directly tied to the production process.

Conversion Costs

These are costs incurred during the manufacturing process to convert raw materials into finished products, including direct labor and factory overhead expenses.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.