Bramble Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018   $283,000 net loss   2019   $36,000 net loss   2020   $746,000 net income At December 31, 2020, Bramble Inc. capital accounts were as follows. 9% cumulative preferred stock, par value $100; authorized, issued,         and outstanding 5,300 shares   $530,000 Common stock, par value $1.00; authorized 1,000,000 shares;         issued and outstanding 758,000 shares   $758,000 Bramble Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Bramble began operations. The state law permits dividends only from retained earnings.(a) Compute the book value of the common stock at December 31, 2020.  Book value per share   $enter a dollar amount of the book value of the common stock at December 31, 2020 rounded to 2 decimal places (b) Compute the book value of the common stock at December 31, 2020, assuming that the preferred stock has a liquidating value of $107 per share.

Question

Bramble Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations.

2018
  $283,000 net loss  
2019
  $36,000 net loss  
2020
  $746,000 net income


At December 31, 2020, Bramble Inc. capital accounts were as follows.

9% cumulative preferred stock, par value $100; authorized, issued,    
    and outstanding 5,300 shares   $530,000
Common stock, par value $1.00; authorized 1,000,000 shares;    
    issued and outstanding 758,000 shares   $758,000


Bramble Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Bramble began operations. The state law permits dividends only from retained earnings.

(a) Compute the book value of the common stock at December 31, 2020. 

Book value per share   $enter a dollar amount of the book value of the common stock at December 31, 2020 rounded to 2 decimal places


(b) Compute the book value of the common stock at December 31, 2020, assuming that the preferred stock has a liquidating value of $107 per share.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Mandatorily redeemable preferred stock (preference shares) is reported among liabilities and their d...

A: International Financial Reporting Standards:They are commonly known as IFRS. It is a set of accounti...

Q: (Change in Principle—Long-Term Contracts) Pam Erickson Construction Company changed from the complet...

A: a.Compute net income.

Q: During 2016, WMC Corporation discovered that its ending inventories reported on its financial statem...

A: 1. 

Q: What are some reasons corporations issue stock dividends?

A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in...

Q: Purposes of cost allocation. Mary Martin recently started a job as an administrative assistant in th...

A: Direct cost:Direct cost is that cost which can be directly identified with the manufacturing of a pa...

Q: Simmons Corporation owns stock of Armstrong, Inc. Prior to 2020, the investment was accounted for us...

A: The dividend revenue of $8,000 is obtained by multiplying the net income of $80,000 with the percent...

Q: Fores Construction Company reported a pretax operating loss of $135 million for financial reporting ...

A: 1.

Q: Sheffield Inc. owns shares of Tamarisk Corporation stock. At December 31, 2020, the securities were ...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: Fantasy Fashions had used the LIFO method of costing inventories, but at the beginning of 2016 decid...

A: