Toleman biochemicals decided to offer shares to the public

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Reference no: EM13378180

Toleman Biochemicals decided to offer shares to the public for the first time on January 1^st 2007. Toleman were authorized to sell 100,000 Preferred shares with a par value of $ 5 each and 1,000,000 Common shares with a par value of $ 10 each. By December 31^st 2007 all of the Preferred shares had been sold at their par value and 700,000 Common shares had been sold at an average price of $ 15 each.

On November 18^th 2007 Toleman had bought back 50,000 Common shares for $ 16 per share in order to have treasury stock that could be used for executive stock options.

Net Income for 2007 was $ 1,462,500

At the end of 2007 a dividend of $ 1 per Common share was declared.

No dividend was given on Preferred shares.

Retained earnings from previous years December 31^st 2007 totaled $ 2,000,000.

Required: a: Prepare the Equity section of Toleman's Balance Sheet on December 31^st 2007 ?

b: What was the book value per share of the outstanding common shares on December 31^st2007 ?

Reference no: EM13378180

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