Question

# You are given the following information for Smashville, Inc.   Cost of goods sold: \$ 174,000 Investment...

You are given the following information for Smashville, Inc.

 Cost of goods sold: \$ 174,000 Investment income: \$ 1,400 Net sales: \$ 379,000 Operating expense: \$ 86,000 Interest expense: \$ 7,400 Dividends: \$ 8,000 Tax rate: 40 %
 Current liabilities: \$ 21,000 Cash: \$ 21,000 Long-term debt: \$ 46,000 Other assets: \$ 38,000 Fixed assets: \$ 130,000 Other liabilities: \$ 3,000 Investments: \$ 34,000 Operating assets: \$ 64,000

During the year, Smashville, Inc., had 25,000 shares of stock outstanding and depreciation expense of \$15,000. Calculate the book value per share, earnings per share, and cash flow per share. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

 Book Value = A-L = (cash+other assets+fixed assets+investments+operating assets)-(current liabilities+long term debt+ other liabilities) Book Value = (21,000+38,000+130,000+34,000+64,000)-(21,000+46,000+ 3,000) Book Value = 217,000 Book value per share = Book value/Number of shares outstanding Book value per share = 217,000/25000 Book value per share = \$8.68 Net income = [(Sales + Investment income)- (cost of goods sold+Operating expense+interest expense)]X(1-tax rate) Net income = [(379,000 + 1,400)- (174,000+86,000+7,400)]X(1-0.40) Net income =67,800 Earning per share = Net income /Number of shares outstanding Earning per share = 67,800 /25,000 Earning per share = \$ 2.71 Cash flow per share = (Net income+ Depreciation)/ Number of shares outstanding Cash flow per share = (67,800+15000)/25000 Cash flow per share = \$3.31

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