Exercise 15-24

Johnstone Inc. began operations in January 2014 and reported the following results for each of its 3 years of operations.

2014

$260,000 net loss

2015

$40,000 net loss

2016

$700,000 net income

At December 31, 2016, Johnstone Inc. share capital accounts were as follows.

Share CapitalPreference, 6% cumulative, par value $100; authorized, issued, and outstanding 5,000 shares		$500,000
Share CapitalOrdinary, par value $1.00; authorized 1,000,000 shares; issued and outstanding 750,000 shares		$750,000

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

	Your answer is incorrect. Try again.

Compute the book value of the ordinary shares at December 31, 2016. (Round answer to 2 decimal places, e.g. 1.25.)

Book value of the ordinary shares

$

LINK TO TEXT

	Your answer is incorrect. Try again.

Compute the book value of the ordinary shares at December 31, 2016, assuming that the preference shares have a liquidating value of $106 per share. (Round answer to 2 decimal places, e.g. 1.25.)

Book value of the ordinary shares

$