Parsley Corporation had 250,000 shares of common stock and 5,000 shares of 8%, $100 par, preferred stock outstanding on December 31, 2017. The preferred stock is cumulative, nonconvertible preferred stock. On June 1, 2018, Parsley sold 36,000 shares of common stock for cash. No cash dividends were declared for 2018. Parsley reported a net loss of $320,000 for the year ended December 31, 2018. Calculate Parsley's loss per share for the year ended December 31, 2016. (Round your answer to 2 decimal places.)

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Business

Jamarcus Palmer

26 September, 16:26

Parsley Corporation had 250,000 shares of common stock and 5,000 shares of 8%, $100 par, preferred stock outstanding on December 31, 2017. The preferred stock is cumulative, nonconvertible preferred stock. On June 1, 2018, Parsley sold 36,000 shares of common stock for cash. No cash dividends were declared for 2018. Parsley reported a net loss of $320,000 for the year ended December 31, 2018. Calculate Parsley's loss per share for the year ended December 31, 2016. (Round your answer to 2 decimal places.)

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Shaniya Rowland · Answer 1

Calculation of total loss:

Net loss 320,000

Preferred dividend [5000*8%*100] 40,000

Total loss 360,000

Calculation of shares:

Common shares 250,000

Additional common stock [36,000*7/12] 21,000

Total shares 271,000

Loss per share = 360,000/271,000 = $1.328