Sunland Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018   $252,000 net loss   2019   $39,000 net loss   2020   $868,000 net income At December 31, 2020, Sunland Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued,         and outstanding 4,900 shares   $490,000 Common stock, par value $1.00; authorized 1,000,000 shares;         issued and outstanding 769,000 shares   $769,000 Sunland Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Sunland began operations. The state law permits dividends only from retained earnings. (a) Compute the book value of the common stock at December 31, 2020. (Round answers to 2 decimal places, e.g. $38.50.) 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 $105 per share. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share   $enter the book value per share in dollars rounded to 2 decimal places

Question

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

2018
  $252,000 net loss  
2019
  $39,000 net loss  
2020
  $868,000 net income


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

8% cumulative preferred stock, par value $100; authorized, issued,    
    and outstanding 4,900 shares   $490,000
Common stock, par value $1.00; authorized 1,000,000 shares;    
    issued and outstanding 769,000 shares   $769,000


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

(a) Compute the book value of the common stock at December 31, 2020. (Round answers to 2 decimal places, e.g. $38.50.)

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 $105 per share. (Round answers to 2 decimal places, e.g. $38.50.)

Book value per share   $enter the book value per share in dollars rounded to 2 decimal places

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