Question
In: Accounting
1. A company reports the following: Income before income tax expense $6,000,000 Interest expense 300,000 Determine...
1. A company reports the following:
| Income before income tax expense | $6,000,000 |
| Interest expense | 300,000 |
Determine the times interest earned ratio.
2. A company reports the following:
| Sales | $6,480,000 |
| Average total assets | 2,400,000 |
Determine the asset turnover ratio. Round your answer to one decimal place.
3. A company reports the following income statement and balance sheet information for the current year:
| Net income | $110,000 |
| Interest expense | 77,000 |
| Average total assets | 1,700,000 |
Determine the return on total assets. Round percentage
to one decimal place.
%
4. A company reports the following:
| Net income | $750,000 |
| Preferred dividends | 150,000 |
| Average stockholders' equity | 5,000,000 |
| Average common stockholders' equity | 3,750,000 |
Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity.
| a. The Return on Stockholders’ Equity | % |
| b. The Return on Common Stockholders’ Equity | % |
5. A company reports the following:
| Net income | $460,000 |
| Preferred dividends | $40,000 |
| Shares of common stock outstanding | 150,000 |
| Market price per share of common stock | $40.60 |
a. Determine the company's earnings per share
on common stock. Round your answer to two decimal places.
Use the rounded answer of requirement a for subsequent requirement,
if required.
$
b. Determine the company's price-earnings ratio. Round your answer to one decimal place.
6. The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
| Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Retained earnings, January 1 | $3,704,000 | $3,264,000 | |
| Net income | 600,000 | 550,000 | |
| Dividends: | |||
| On preferred stock | (10,000) | (10,000) | |
| On common stock | (100,000) | (100,000) | |
| Retained earnings, December 31 | $4,194,000 | $3,704,000 | |
| Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Sales | $10,850,000 | $10,000,000 | |
| Cost of merchandise sold | 6,000,000 | 5,450,000 | |
| Gross profit | $4,850,000 | $4,550,000 | |
| Selling expenses | $2,170,000 | $2,000,000 | |
| Administrative expenses | 1,627,500 | 1,500,000 | |
| Total operating expenses | $3,797,500 | $3,500,000 | |
| Income from operations | $1,052,500 | $1,050,000 | |
| Other revenue and expense: | |||
| Other revenue | 99,500 | 20,000 | |
| Other expense (interest) | (132,000) | (120,000) | |
| Income before income tax expense | $1,020,000 | $950,000 | |
| Income tax expense | 420,000 | 400,000 | |
| Net income | $600,000 | $550,000 | |
| Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 |
|||
| 20Y2 | 20Y1 | ||
| Assets | |||
| Current assets: | |||
| Cash | $1,050,000 | $ 950,000 | |
| Marketable securities | 301,000 | 420,000 | |
| Accounts receivable (net) | 585,000 | 500,000 | |
| Inventories | 420,000 | 380,000 | |
| Prepaid expenses | 108,000 | 20,000 | |
| Total current assets | $2,464,000 | $2,270,000 | |
| Long-term investments | 800,000 | 800,000 | |
| Property, plant, and equipment (net) | 5,760,000 | 5,184,000 | |
| Total assets | $9,024,000 | $8,254,000 | |
| Liabilities | |||
| Current liabilities | $880,000 | $800,000 | |
| Long-term liabilities: | |||
| Mortgage note payable, 6% | $200,000 | $0 | |
| Bonds payable, 4% | 3,000,000 | $3,000,000 | |
| Total long-term liabilities | $3,200,000 | $3,000,000 | |
| Total liabilities | $4,080,000 | $3,800,000 | |
| Stockholders' Equity | |||
| Preferred 4% stock, $5 par | $250,000 | $250,000 | |
| Common stock, $5 par | 500,000 | 500,000 | |
| Retained earnings | 4,194,000 | 3,704,000 | |
| Total stockholders' equity | $4,944,000 | $4,454,000 | |
| Total liabilities and stockholders' equity | $9,024,000 | $8,254,000 | |
Required:
Determine the following measures for 20Y2, rounding to one decimal place, except dollar amounts which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
| 1. Working capital | $ | |
| 2. Current ratio | ||
| 3. Quick ratio | ||
| 4. Accounts receivable turnover | ||
| 5. Number of days' sales in receivables | days | |
| 6. Inventory turnover | ||
| 7. Number of days' sales in inventory | days | |
| 8. Ratio of fixed assets to long-term liabilities | ||
| 9. Ratio of liabilities to stockholders' equity | ||
| 10. Times interest earned | ||
| 11. Asset turnover | ||
| 12. Return on total assets | % | |
| 13. Return on stockholders’ equity | % | |
| 14. Return on common stockholders’ equity | % | |
| 15. Earnings per share on common stock | $ | |
| 16. Price-earnings ratio | ||
| 17. Dividends per share of common stock | $ | |
| 18. Dividend yield | % |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
1. A company reports the following: Income before income tax expense $6,000,000 Interest expense 300,000 Determine...
1. A company reports the following:
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Interest expense
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Determine the times interest earned ratio.
2. A company reports the following:
Sales
$6,480,000
Average total assets
2,400,000
Determine the asset turnover ratio. Round your answer to
one decimal place.
3. A company reports the following income statement and balance
sheet information for the current year:
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Interest expense
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Average total assets
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2013
2012
Current tax expense
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$775
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$756
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93
78
63
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13
21
939
7
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36
43
(15)
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1,744
1,378
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Current tax expense
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Non-U.S.
93
78
63
U.S. state
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21
939
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1,630
1,308
Non-U.S
36
43
(15)
U.S state
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85
956
1,744
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