Book Value Per Share

The right of a shareholder( in peso amount ) in the assets of the

corporation., Such will be the amount of asserts to be paid to a
shareholder in case the corporation will be liquidated.
SHAREHOLDERS’ EQUITY
NUMBER OF SHARES ISSUED & OUTSTANDING
 1. When there are 2 classes of shares: Preference and
Ordinary, determine the shareholders’ equity per class of
share to compute for book value per share by:

Book Value
1st: Assign an amount to Preference and Ordinary at par value
per share
Accounting
Rules: 2nd: Compute the dividend per share of preference and ordinary considering preference dividend rights.

3rd : Any remainder in shareholders’ equity after considering the Preference and Ordinary at Par and
Dividends is given to Ordinary Shares.
Compute for Book Value per share for each case below:
A. Ordinary shares,P50…….P1,500,000
Retained Earnings……… (P90,000)

• Book Value= Shareholders’ Equity/ no. of shares outstanding

• Book Value= 1,500,000– 90,000/ 30,000 shares
• P37 per share
B.Total Assets-P1 Million; Total Liabilities-
P600,000; Share Capital- 20,000 shares.
• Book Value=Shareholders’ Equity/ no. of shares issued & outstanding
• 1,000,000 – 600,000= 400,000/ 20,000shares
• = P20 per share
C. 8% Preference, P100par…P500,000
Ordinary Shares, P10par..P760,000
Retained Earnings………. 342,760
Total Stockholders’ EquityP1,602,760
No dividends declared.

• Particulars Total SE. Preference. Ordinary

• Par Value. 1,260,000. 500,000. 760,000
• Dividends 0 0
• Remainder 342,760. 342,760
• (1,602,760-1,260,000)
• TOTAL. 1,602,760. 500,000. 1,102,760
• Book Value pershare. 500,000/5000sh. 1,102,760/76000sh
• P100pershare. P14.51per share
D. 9% Preference, P100 par, cumulative, nonparticipating, P200,000;
Ordinary, P25 par,P750,000; Retained Earnings 130,000; three years
dividend in arrears including current year.

Particulars. Total SE. Preference. Ordinary

Par value. 950,000 200,000. 750,000
Dividends
(9%x 200,000x3yrs) 54,000 54,000
Remainder
(1,080,000-950,000-54000.) 76,000. 76,000
TOTAL. 1,080,000 254,000 826,000
Book Value computation. 254,000/2000sh. 826,000/30,000s
Book Value per share P127. P27.53
E. Same as D ,except that preference
dividend right is cumulative and
participating up to P1,000.
 Particulars Total S.E Preference Ordinary
Par Value 950,000 200,000 750,000
Dividends 54,000 54,000  
(95 x 200,000 x 3 years)

Ordinary 67,500   67,500

(9% x 750,000 x 1year)

Remainder 8,500 1,000 7,500

(1,080,000 – 950,000 - 54,000 –
67,500)

Balance 1,080,000 255,000 825,000

Book Value Computation   255,000 / 2,000 sh 825,000 / 30,000 sh

Book Value Per share   P 127.50 P 27.50