Let's break down the two questions using the provided data: ### **1. Book Value Per Share** **Book value per share** is calculated as: \[ \text{Book Value Per Share} = \frac{\text{Total Common Equity}}{\text{Number of Common Shares Outstanding}} \] From the balance sheet: - **Common stock (10,000 shares)**: $100,000 - **Retained earnings**: $240,000 \[ \text{Total Common Equity} = \$100,000 + \$240,000 = \$340,000 \] \[ \text{Number of Common Shares Outstanding} = 10,000 \] \[ \text{Book Value Per Share} = \frac{340,000}{10,000} = \$34.00 \] --- ### **2. Liquidation Value Per Share** #### **Liquidation values (as per instructions):** - Cash: 100% of book value - Marketable securities: 100% of book value - Accounts receivable: 95% of book value - Inventories: 50% of book value - Land and buildings: 130% of book value - Machinery and equipment: 50% of book value #### **Assets calculation:** - Cash: $50,000 × 100% = $50,000 - Marketable securities: $90,000 × 100% = $90,000 - Accounts receivable: $95,000 × 95% = $90,250 - Inventories: $135,250 × 50% = $67,625 - Land and buildings: $138,769 × 130% = $180,399.70 - Machinery and equipment: $338,780 × 50% = $169,390 **Total Liquidation Value of Assets:** \[ 50,000 + 90,000 + 90,250 + 67,625 + 180,399.70 + 169,390 = \$647,664.70 \] #### **Liabilities & Preferred Stock:** - Accounts payable: $91,350 - Notes payable: $35,100 - Accrued wages: $15,150 - Accrued taxes: $18,150 - Long-term debt: $200,000 - Preferred stock: $25,000 **Total Liabilities and Preferred Stock:** \[ 91,350 + 35,100 + 15,150 + 18,150 + 200,000 + 25,000 = \$384,750 \] #### **Liquidation Value for Common Stockholders:** \[ \text{Net Liquidation Value} = 647,664.70 - 384,750 = \$262,914.70 \] \[ \text{Liquidation Value Per Share} = \frac{262,914.70}{10,000} = \$26.29 \] --- ## **Summary** 1. **Book value per share:** **\$34.00** 2. **Liquidation value per share:** **\$26.29** If you need the detailed calculations or have any questions, let me know!