problem 1: Company X is presumably doing well. The corporation's balance sheet last September 31 can be summarized as follows:

Total Assets       $6,000,000
Total Liabilities    $2,000,000

Stockholder's equity:
    Common stock:                          1,500,000 shares
    of $1.00 par value shares issued
    andoutstanding                          $1,500,000

Retained Earnings                           $3,000,000

Total Stockholders' equity                $4,500,000
Total Liabilities & Stockholders'
Equity                                          $6,500,000

Net Income last year was $.5 million. The common stock is currently selling for $11.00 per share.

Compute the following and show the formula:

• Book value of the corporation.
• Book value per share.
• Value of the corporation if earnings are capitalized at 200.
• Capitalized value per share.
• Market value of the entire corporation.

problem 2: When Lydia started her vending machine business, she instituted flexible budgeting for the first few months of operations. Her first monthly budget numbers were these:

Cost of goods sold             200 of sales
Advertising                       l5% of sales
Salaries                           $4,000
Delivery expense               2% of sales
Rent                               $1,000
Insurance                        $200
Supplies                          5% of sales
Telephone                        $150

Compute and list the budget figures for September, when sales were $50,000.