Question

In: Accounting

Wildhorse Co. had net income of $175240 and paid dividends of $40000 to common stockholders and...

Wildhorse Co. had net income of $175240 and paid dividends of $40000 to common stockholders and $19000 to preferred stockholders in 2020. Wildhorse Co.’s common stockholders’ equity at the beginning and end of 2020 was $862000 and $1370000, respectively. Wildhorse Co.’s return on common stockholders’ equity was

11.00%.

14.00%.

10.00%.

16.00%.

Solutions

Expert Solution

Correct Option B i.e. 14%
Return on Equity = Net Income to common stockholder/ Average Equity
                                    = 156240 / 1116000
14.00%
Net Income to common stockholder
Net Income          175,240
Less: Dividend to preference stockholder          (19,000)
Net Income to common stockholder          156,240
Average Equity =( Beginning Equity + Ending Equity )/2
     =(862000 + 1370000)/2
                                                        1,116,000

Related Solutions

Sheffield Corp. had net income of $163625 and paid dividends of $48500 to common stockholders and...
Sheffield Corp. had net income of $163625 and paid dividends of $48500 to common stockholders and $16500 to preferred stockholders in 2020. Sheffield Corp.’s common stockholders’ equity at the beginning and end of 2020 was $890000 and $1250000, respectively. Sheffield Corp.’s return on common stockholders’ equity was 13.75%. 10.75%. 9.75%. 15.75%.
8 A firm paid total cash dividends of $119 and had net income of $217 in...
8 A firm paid total cash dividends of $119 and had net income of $217 in 2008. If it earned $328 in 2009 and maintained the same dividend payout ratio that it paid in this year, what will the firm's total dividends be? Please round to two decimals
The comparative statements of Wildhorse Co. are presented here. WILDHORSE CO. Income Statements For the Years...
The comparative statements of Wildhorse Co. are presented here. WILDHORSE CO. Income Statements For the Years Ended December 31 2022 2021 Net sales $2,289,400 $2,135,000 Cost of goods sold 1,267,000 1,247,440 Gross profit 1,022,400 887,560 Selling and administrative expenses 620,000 593,960 Income from operations 402,400 293,600 Other expenses and losses    Interest expense 27,280 24,800 Income before income taxes 375,120 268,800 Income tax expense 112,536 80,640 Net income $ 262,584 $ 188,160 WILDHORSE CO. Balance Sheets December 31 Assets 2022 2021...
Wildhorse Co.’s income statement contained the condensed information below. Wildhorse Co. Income Statement For the Year...
Wildhorse Co.’s income statement contained the condensed information below. Wildhorse Co. Income Statement For the Year Ended December 31, 2022 Service revenue $1,358,000 Operating expenses, excluding depreciation $859,600 Depreciation expense 77,000 Loss on disposal of plant assets 22,400 959,000 Income before income taxes 399,000 Income tax expense 78,400 Net income $320,600 Wildhorse Co.’s balance sheets contained the following comparative data at December 31. 2022 2021 Accounts receivable $98,000 $84,000 Accounts payable 57,400 44,800 Income taxes payable 18,200 9,800 Accounts payable...
Wildhorse Co.’s income statement contained the condensed information below. Wildhorse Co. Income Statement For the Year...
Wildhorse Co.’s income statement contained the condensed information below. Wildhorse Co. Income Statement For the Year Ended December 31, 2017 Service revenue $2,463,800 Operating expenses, excluding depreciation $1,559,560 Depreciation expense 139,700 Loss on disposal of plant assets 40,640 1,739,900 Income before income taxes 723,900 Income tax expense 142,240 Net income $581,660 Wildhorse Co.’s balance sheet contained the comparative data at December 31. 2017 2016 Accounts receivable $177,800 $152,400 Accounts payable 104,140 81,280 Income taxes payable 33,020 17,780 Accounts payable pertain...
True/ False questions 1) Dividends paid to stockholders are tax deductible on a corporations income Statement....
True/ False questions 1) Dividends paid to stockholders are tax deductible on a corporations income Statement. 2) Common stock in a corporation can be privately owned by private investors or publicly owned by public investors. 3) the number of outstanding shares of common stock is always greater than or equal to the number of authorized shares of common stock 4) Typically small corporations are publicly owned large corporations are privately or closely owned.
Wildhorse Company had $278,700 of net income in 2019 when the selling price per unit was...
Wildhorse Company had $278,700 of net income in 2019 when the selling price per unit was $154, the variable costs per unit were $94, and the fixed costs were $573,300. Management expects per unit data and total fixed costs to remain the same in 2020. The president of Wildhorse Company is under pressure from stockholders to increase net income by $42,600 in 2020. A.)Compute the number of units sold in 2019. B.)Compute the number of units that would have to...
Net income for the year was $117,000. Dividends of $114,000 cash were declared and paid. Scoreteck’s...
Net income for the year was $117,000. Dividends of $114,000 cash were declared and paid. Scoreteck’s only noncash expense was $87,000 of depreciation. The company purchased plant assets for $87,000 cash. Notes payable of $37,000 were issued for $37,000 cash.    Complete the following spreadsheet in preparation of the statement of cash flows. (The statement of cash flows is not required.) Report operating activities under the indirect method. (Enter all amounts as positive values.) SCORETECK CORPORATION Spreadsheet for Statement of...
Assume that in 2017, The Shallonz Corporation reported net income of $143 million, and paid dividends...
Assume that in 2017, The Shallonz Corporation reported net income of $143 million, and paid dividends totaling $36.5 million throughout the year. Their net income has been growing at about 5% per year for some time, but it is expected to grow by 20% in 2018. Growth is expected to return to the normal 5% the following year and thereafter. It has also been estimated that the company will need about $52 million in funds for capital expenditures in 2018....
Preferred stockholders have a priority over common stockholders as to dividends only. assets in the event...
Preferred stockholders have a priority over common stockholders as to dividends only. assets in the event of liquidation only. voting rights. both dividends and assets in the event of liquidation.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT