Question 7

IMA Believer Corps balance sheet reported the following shareholders equity as of December 31,

2016:

	Beginning of the Year	End of the Year
Current assets	$62,000	$82,000
Current liabilities	25,000	55,000
Plant and equipment	300,000	350,000
Long-term liabilities	50,000	75,000
Common shareholders equity	125,000	225,000
Preferred shareholders equity	60,000	85,000

Share Capital:
Preferred shares, $100 stated value; $5 cumulative, 10,000 shares authorized, 10,000 issued	$1,000,000
Common shares 200,000 shares authorized, 50,000 shares issued	500,000
Total share capital	$2,500,000
Retained earnings	500,000
Total shareholders equity	$3,000,000

1. Assuming there are 3 years dividends in arrears (including that of the current year), determine (1)

preferred equity and (2) book value per share of common shares.