Nama : Prayogi Gunawan

NIM : 0311902001

Quiz 4: Analyzing financing activities: Equity

Computation of selected financial ratios.
The following information pertains to Parsons Co.:
Preference shares, cumulative:
Par per share $100
Dividend rate 8%
Shares outstanding 5,000
Dividends in arrears none
Ordinary shares:
Par per share $10
Shares issued 60,000
Dividends paid per share $2.70
Market price per share $48.00
Share premium—ordinary $200,000
Unappropriated retained earnings (after closing) $135,000
Retained earnings appropriated for contingencies $150,000
Ordinary treasury shares:
Number of shares 5,000
Total cost $125,000
Net income $370,000

Instructions
Compute (assume no changes in balances during the past year):
(a) Total amount of equity in the statement of financial position
(b) Earnings per share
(c) Book value per ordinary share
(d) Payout ratio
(e) Return on ordinary share equity
Answer

a) Total amount equity in statement of financial position:

(5.000 x $100) + (60.000 x $10) + $200.000 + $135.000+ $150.000 - $125.000
= $1.460.000
b) {$370.000 – (5.000 x $100 x 8%)} : (60.000 – 5.000)
= $6 per share
c) (Total equity – preference shares) : (ordinary shares issued-preference shares outstanding)
($1.460.000 - $500.000) : (60.000 – 5.000)
= $17.45 per share
d) (Dividends paid per ordinary share : EPS) = $2.7 : $6 = 45%
e) ($370.000 - $40.000) : ($1.460.000 - $500.000) = 34,4%