Question
In: Accounting
The following selected data were taken from the financial statements of Squiggle Group Inc. for December...
The following selected data were taken from the financial statements of Squiggle Group Inc. for December 31, 2016, 2015 and 2014:
| December 31 | |||||||
| 2016 | 2015 | 2014 | |||||
| Total assets | $294,000 | $265,000 | $236,000 | ||||
| Notes payable (10% interest) | 100,000 | 100,000 | 100,000 | ||||
| Common stock | 40,000 | 40,000 | 40,000 | ||||
| Preferred 6% stock, $100 par | 20,000 | 20,000 | 20,000 | ||||
| (no change during year) | |||||||
| Retained earnings | 93,395 | 73,850 | 60,000 | ||||
The 2016 net income was $20,745, and the 2015 net income was $15,050. No dividends on common stock were declared between 2014 and 2016.
a. Determine the rate earned on total assets, the rate earned on stockholders' equity, and the rate earned on common stockholders' equity for the years 2015 and 2016. When required, round to one decimal place.
| 2016 | 2015 | |||
| Rate earned on total assets | % | % | ||
| Rate earned on stockholders' equity | % | % | ||
| Rate earned on common stockholders' equity | % | % | ||
Solutions
Expert Solution
Ans. a
2016 2015
Rate earned on total assets 7.06% 5.68%
(20745/294000)X100 (15050/265000)X100
Rate earned on stockholder equity 13.52% 11.24%
(20745/153395)X100 (15050/133850)X100
Rate earned on common stockholders equity 15.55% 13.22%
(20745/133395)X100 (15050/113850)X100
ekkarill92 answered 1 year agoRelated Solutions
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90,000
90,000
90,000
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36,000
36,000
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18,000
18,000
18,000
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Serial bonds payable, 10%
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90,000
110,000
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3,430,000
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Common stock
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44,000
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22,000
22,000
22,000
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80,880
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18,000
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20Y6
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Notes payable (8% interest)
80,000
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Common stock
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32,000
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16,000
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88,275
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