CERVEZA CORPORATION Comparative Income Statement This Year Last Year Sales (all on account) …………………………………….. $452,000 $388,000 Less cost of goods sold ………………………………….. 260,000 221,000 Gross margin ………………………………………………… 192,000 167,000 Less operating expenses …………………………………. 104,000 89,000 Net operating income …………………………………….. 88,000 78,000 Less interest expense ……………………………………… 8,000 8,000 Net income before taxes …………………………………. 80,000 70,000 Less income taxes (30%) ……………………………….. 24,000 21,000 Net income …………………………………………………… $ 56,000 $ 49,000 CERVEZA CORPORATION Comparative Balance Sheet This Year Last Year Assets Current assets: Cash ………………………………………………………….. $ 42,000 $ 21,000 Marketable securities ………………………………….. 32,000 28,000 Accounts receivable, net ……………………………… 84,000 102,000 Inventory …………………………………………………… 96,000 70,000 Prepaid expenses ………………………………………… 11,000 9,000 Total current assets ………………………………………… 265,000 230,000 Plant and equipment, net ………………………………… 410,000 380,000 Total assets …………………………………………………… $675,000 $610,000 Liabilities and Stockholders’ Equity Liabilities: ……………………………………………………. Current liabilities ………………………………………… $115,000 $ 90,000 Bonds payable, 10% ……………………………………. 80,000 80,000 Total liabilities ……………………………………………… 195,000 170,000 Stockholders’ equity: Preferred stock, $100 par, 7% ………………………. 100,000 100,000 Common stock, $5 par ………………………………… 300,000 300,000 Retained earnings ……………………………………….. 80,000 40,000 Total stockholders’ equity ………………………………. 480,000 440,000 Total liabilities and stockholders’ equity ………….. $675,000 $610,000 What is Cerveza’s book value per share at the end of this year? (rounded if necessary)
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