Question

At December 31, 2015, Albrecht Corporation had outstanding 368,000 shares of common stock and 6,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2016, Albrecht sold for cash 12,000 shares of its common stock. No cash dividends were declared for 2016. For the year ended December 31, 2016, Albrecht reported a net loss of $1,743,000.

Calculate Albrecht's net loss per share for the year ended December 31, 2016.

Answer 1

Net loss per share is -$4.80

Step-by-step explanation:

The net loss per share is the total loss in the year divided by the weighted average number of common stock in the year.

Total net loss=net loss-preferred stock dividend

preferred stock dividend=$100*6,000*9.5%=$ 57,000.00

total net loss=-$1,743,000-$57,000=-$1,800,000

weighted average number of common stock=368,000*5/12+(368,000+12,000)*7/12=375,000 shares

net loss per share=-$1,800,000/375,000=-$4.80