Book Value per Share

NAME: Date:

QUIZ:

1. Which of the following is incorrect when computing for preference shareholders’

equity?
a. The liquidation value, or in the absence thereof, the aggregate par value, is
allocated to the preference shareholders’ equity.
b. If the preference shares are cumulative, all dividends in arrears are allocated.
c. If the preference shares are noncumulative, only the current year dividend is
allocated.
d. If there are no dividends in arrears, only one-year dividends are allocated to the
preference shareholders’ equity.

2. The numerator used in the computation of book value per share is

m
a. market value of net assets

er as
b. carrying amount of net assets

co
c. total outstanding shares

eH w
d. authorized capitalization

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3. The denominator used in the computation of book value per share is
rs e
a. number of outstanding shares
ou urc
b. weighted average outstanding shares
c. number of issued shares
d. number of authorized shares
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4. Which of the following is excluded when computing for the number of shares
aC s

outstanding?
vi y re

a. treasurer shares c. issued shares

b. subscribed but unpaid shares d. treasury shares

5. Which of the following is incorrect when computing for book value per share when
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there are fully participating preference shares?

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a. The ordinary shareholders’ equity is allocated one year dividend in arrears.

b. The amount subject to participation is allocated to participating preference
shares and ordinary shares based on aggregate par values of outstanding
shares.
is

c. Only participating preference shares and ordinary shares share on the amount
subject to allocation.
Th

d. The ordinary shareholders’ equity is allocated the aggregate par value before
participation by participating preference shares.

6. Boe Corporation's stockholders' equity at December 31, 2008 was as follows:

sh

6% noncumulative preference shares, ₱100 par (liquidation value ₱105

1,000,000
per share)
Ordinary shares, ₱100 par 3,000,000
Retained earnings 950,000

Preferred dividends have been paid up to December 31, 2008.

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 At December 31, 2008, Boe's book value per common share was
a.131.70 b.130.00 c.129.70 d.128.00

7. Nova Corporation has an authorized capital of 10,000 shares of ₱100 par, 8%

cumulative preferred stock and 20,000 shares of ₱100 par common stock. The
equity account balances at December 31, 2008 are as follows:

Cumulative preferred stock

500,000
Common stock
1,100,000
Additional paid in capital
200,000
Retained earnings
260,000
Treasury stock, common-1,000 shares at cost
(150,000)
Total shareholders' equity

m
1,910,000

er as
co
Dividends on preferred stock are in arrears for 2007 and 2008. The book value of a

eH w
share of common stock at December 31, 2008 should be
a. 125 b. 191 c. 133 d. 141

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rs e
8. Georgia, Inc. has an authorized capital of 1,000, ₱100 par, 8% cumulative
ou urc
preference shares and 100,000, ₱10 par, ordinary shares. The equity account
balances at December 31, 20x1, are as follows:
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Cumulative preference share 50,000

Ordinary share 90,000
aC s

Share premium 9,000

vi y re

Retained earnings 13,000

Treasury shares, ordinary – 100 shares at cost (2,000)
Total 160,000
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Dividends on preferred stock are in arrears for the year 20x1. The book value per
ar stu

ordinary share at December 31, 20x1, should be

a. 11.78 b. 11.91 c. 12.22 d. 12.36

9. Hoyt Corp.’s current balance sheet reports the following stockholders’ equity:
is

5% cumulative preference shares, ₱100 par value 250,000

Th

Ordinary share, par value ₱3.50 per share 350,000

Share premium on ordinary shares 125,000
Retained earnings 300,000
sh

Dividends in arrears on the preference share amount to ₱25,000. If Hoyt were to be

liquidated, the preference stockholders would receive par value plus a premium of
₱50,000. The book value per ordinary share is
a. 7.75 b. 7.50 c. 7.25 d. 7.00

10. Maga Corp.'s shareholders' equity at December 31, 20x1, comprised the following:

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 6% cumulative preference share, ₱100 par; liquidating value ₱110
per share; authorized, issued, and outstanding 50,000 shares 5,000,000
Ordinary share, ₱5 par; 1,000,000 shares authorized; issued
and outstanding 400,000 shares 2,000,000
Retained earnings 1,000,000

Dividends on preferred stock have been paid through 20x0 but have not been declared
for 20x1. At December 31, 20x1, Maga's book value per ordinary share was
a. 5.50 b. 6.25 c. 6.75 d. 7.50

m
er as
co
eH w
o.
rs e
ou urc
o
aC s
vi y re
ed d
ar stu
is
Th
sh

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