*E15-24B (Computation of Book Value per Share) Kirk and Kirk, Ltd. began operations in July 2013 and reported the following results for each of its first 3 years of operations. 2013 $20,000 net income 2014 $640,000 net loss 2015 $950,000 net income At Dec

*E15-24B (Computation of Book Value per Share) Kirk and Kirk, Ltd. began operations in July 2013 and reported the following results for each of its first 3 years of operations.

2013      $20,000     net income 2014     $640,000      net loss 2015       $950,000 net income

At December 31, 2015, Kirk and Kirk, Ltd.’s capital accounts were as follows.

16% cumulative preferred stock, par value $100; authorized, issued,

and outstanding 1,000 shares                                                                $100,000

Common stock, par value $1; authorized 10,000,000 shares;

issued and outstanding 50,000 shares                                                      50,000

Kirk and Kirk, Ltd. has never paid a cash or stock dividend. There has been no change in the capital accounts since Kirk and Kirk, Ltd. began operations. The state law permits dividends only from retained

earnings.

Instructions

(a) Compute the book value of the common stock at December 31, 2015.

(b) Compute the book value of the common stock at December 31, 2015, assuming that the preferred stock has a liquidating value of $103 per share.