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SEMESTER SPRING 2017 FINANCIAL STATEMENT ANALYSIS (FIN621) ASSIGNMENT NO. 01 DUE DATE: July, 19 2017

Assignment: ABC Company, a surgical instrument manufacturing company famous all over Pakistan for its refined instruments. The Company was incorporated in 2011 with an authorized capital of 1 million ordinary shares of Re.5 each, and 60,000 8% cumulative preferred shares of Rs. 100 each. ABC Company issued the preferred shares at par with the callable price of Rs. 110 each, and 0.5 million ordinary shares at the premium of Rs. 10 each. Till 2015, ABC Company earned an after-tax profit of Rs. 7,000,000 in cumulative. Since its inception, ABC is paying Rs. 0.5 as the dividend on its ordinary shares. In 2016, however, the company reported a net loss of Rs. 2,000,000 and paid no dividend. ABC’s accounting year ends on December 31 each year.

Requirement:

a) Determine the following as on December 31st, 2016:

          i) ABC’s retained earnings

         ii) Prepare the stockholder’s equity section

b) Book value per share

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plesae provide the solution of FIN621 assignment

check lec 27 page 115 

thank you chanda

and for second part lec 28 first topic ^_^ 

happy chanda plz share ur solution...................................

PC170201059

MUHAMMAD IMRAN

Solution of Assignment no 01

FIN 621

 

Required A:-

 

                 i//

ABC Company

Retain Earnings

As on December 31st, 2016

 

Retained earnings = Opening Balance+ Net Profit Or (Loss for the current year) – Dividend

                          = 70, 00,000-(5, 00,000*.5)-20, 00,000

                          = 70, 00,000-2, 50,000-20, 00,000

                          = 70, 00,000-22, 50, 000

                          = 47, 50,000

 

 

               ii //:-

  

ABC Company

Stock Holder’s Equity

As on December 31st, 2016

 

Common Stock Rs. 5/ share Authorized share stock            10,00, 000

 

 

Issued 500, 000*05                                                               2500,000

Authorized 60, 000 Shares & issued Rs. 10/share                600, 000

Paid in Capital                                                                       85, 00, 000

 

Additional Paid in Capital  

 

Preferred stock (60, 000*100*8%)                                        480, 000

Issued common stock (500, 000*Rs. 5)                                 25, 00, 000

Retained Earnings                                                                  47, 50, 000

Total Retained Earnings                                                         162, 30, 000 

 

 

 

Require B:-

 

 

ABC Company

Book Value per Share

As on December 31st, 2016

 

 

Book Value per Share = Total stock Holder’s Equity- Claim of Preferred Stock Holders at Callable Price/ Total Common shares

 

                                         = 162, 30, 000-(60, 000*110) / 10, 00, 000                 

                                         = 162, 30, 000-66, 00, 000/ 10,00, 000

                                         = 96, 30, 000/ 10, 00 00

  Book Value Per Share    = 9.63

 

 

 

     

 

                                     

 

 

 

 

Fin621  Solution

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Fin621, Assignment Solution:

Determine the following as on December 31st, 2016:

i) ABC’s retained earnings
Retained Earnings = Opening Balance + Net Profit/Loss for the Year - Dividends
Retained Earnings = (7,000,000 - (500,000 x 0.5)) + (-2,000,000)
Retained Earnings = 4,750,000

ii) Stockholder’s equity section
Cumulative 8% preferred stock, convertible Rs.100
Par value callable or redeemable at Rs.110, authorized
60,000 shares; issued 60,000 shares. 6,000,000

Common stock Rs.5
Par/stated value, authorized 1,000,000 shares,
Issued 500,000 shares
2,500,000
Paid in Capital 8,500,000
Additional Paid in Capital
Preferred Stock (60,000xRs.100x8%) 480,000
Common Stock (500,000 shares @ Rs.5) 2,500,000
Retained Earnings 4,750,000
Total Stockholder’s Equity 16,230,000


Book value per share:

Book value per share = Common stock equity / Total common share
= Total stockholders’ equity – claim of preferred stockholders at callable price / 1,000,000
= 16,230,000 – (60000 x 110) / 1,000,000
= 9.63

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