Homework Answers
Question a
Earnings per share is the net income available for each share.
Earnings per share = (Net income - preferred dividend)/average outstanding common sshares
Preferred dividend is deducted because we need income available for common shareholders.
Average common shares= (16,000+24,000)/2 = 20,000 shares
Earnings per share = (102,000-5,000)/20,000
Earnings per share = $4.85 per share
b. Price/Earnings ratio
Price earnings ratio shows the relation between the market price of the share to earnings per share. If the ratio is higher, it is good.
Price/Earnings ratio = Market price/Earnings per share
Price/Earnings ratio = 20.37/4.85 = 4.2 times
Question c
Payout ratio shows how much part of the income available for common shareholders are paid out to them in form of dividend.
Payout ratio = Dividend paid to commom shareholders / net income available for common shareholders *100
Payout ratio = (24,480-5,000)/(102,000-5,000)
Payout ratio = 20.1%
Question d
Times interest earned ratio shows the ability of company to service its debts using the income earned.
Times interest earned = Earnings before interest and taxes / Interest expenses
Times interest earned = (102,000 + 10,000+ 28,500)/10,000
Times interest earned = 14.1 times
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CALCULATOR PULL SCREEN PRINTER VERSION BACK Exercise 18-11 Here is the income statement for Myers, Inc....
Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended...
Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $28,500 income taxes) Net income $424.000 226,000 198,000 96,000 $ 102,000 Additional information: 1. Common stock outstanding January 1, 2020, was 16,000 shares, and 24.000 shares were outstanding at December 31, 2020. 2. The market price of Myers stock was $20.37 in 2020. 3. Cash dividends of $24,480...
CALCULATOR PRINTER VERSION MK NET Exercise 18-11 Here is the income statement for Myers, Inc. Myers,...
CALCULATOR PRINTER VERSION MK NET Exercise 18-11 Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $22,000 income taxes) Net Income $450,000 195.000 254,000 98,000 $ 156,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020, The market price of Myers stock was...
Question 8 Here is the income statement for Myers, Inc. CALCULATOR FULL SCREEN PRINTER Myers, Inc....
Question 8 Here is the income statement for Myers, Inc. CALCULATOR FULL SCREEN PRINTER Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $22,000 income taxes) Net income $450,000 196,000 254,000 98,000 $ 156,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market price of Myers stock was $12.24...
Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended...
Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue $408,000 Cost of goods sold 218,000 Gross profit 190,000 Expenses (including $10,000 interest and $21,500 income taxes) 84,000 Net income $ 106,000 Additional information: 1. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. 2. The market price of Myers stock was $10.00 in 2020. 3. Cash dividends of $29,680...
*Exercise 9-11 Here is the income statement for Myers, Inc. MYERS, INC. Income Statement For the...
*Exercise 9-11 Here is the income statement for Myers, Inc. MYERS, INC. Income Statement For the Year Ended December 31, 2017 Sales revenue $400,000 Cost of goods sold 230,000 Gross profit 170,000 Expenses (including $16,000 interest and $24,000 income taxes) 98,000 Net income $72,000 Additional information: Common stock outstanding January 1, 2017, was 32,000 shares, and 40,000 shares were outstanding at December 31, 2017. 2. The market price of Myers stock was $14 in 2017. 3. Cash dividends of $21,000...
Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods...
Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $23,000 income taxes) Net income $430,000 200,000 230,000 96,000 $ 134,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market price of Myers stock was $11.43 in 2020. Cash dividends of $28,140 were paid, $7,000 of which were to preferred...
Question 6 x Your answer is incorrect. Try again. Here is the income statement for Myers,...
Question 6 x Your answer is incorrect. Try again. Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $21,500 income taxes) Net income $408,000 218,000 190,000 84,000 $ 106,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market price of Myers...
Help me solve this Exercise 18-11 Your answer is incorrect. Try again. Here is the income...
Help me solve this
Exercise 18-11 Your answer is incorrect. Try again. Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $30,000 income taxes) Net income $404,000 186,000 218,000 98,000 $ 120,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market...
Exercise 14-11
Exercise 14-11 Your answer is partially correct. Try again. Here is the income statement for Myers, Inc.Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue $436,000 Cost of goods sold 214,000 Gross profit 222,000 Expenses (including $10,000 interest and $29,500 income taxes)100,000Net income $ 122,000 Additional information:1.Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020.2.The market price of Myers stock was $16.52 in 2020.3.Cash dividends of $24,400 ...
Here is the income statement for Metlock, Inc. METLOCK, INC. Income Statement For the Year Ended...
Here is the income statement for Metlock, Inc. METLOCK, INC. Income Statement For the Year Ended December 31, 2022 Sales revenue $446,200 Cost of goods sold 211,400 Gross profit 234,800 Expenses (including $16,400 interest and $28,500 income taxes) 76,100 $ 158,700 Net income Additional information: 1. Common stock outstanding January 1, 2022, was 29.400 shares, and 36,500 shares were outstanding at December 31, 2022. 2. The market price of Metlock stock was $13 in 2022 3. Cash dividends of $24,300...
Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $28,500 income taxes) Net income $424.000 226,000 198,000 96,000 $ 102,000 Additional information: 1. Common stock outstanding January 1, 2020, was 16,000 shares, and 24.000 shares were outstanding at December 31, 2020. 2. The market price of Myers stock was $20.37 in 2020. 3. Cash dividends of $24,480...
CALCULATOR PRINTER VERSION MK NET Exercise 18-11 Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $22,000 income taxes) Net Income $450,000 195.000 254,000 98,000 $ 156,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020, The market price of Myers stock was...
Question 8 Here is the income statement for Myers, Inc. CALCULATOR FULL SCREEN PRINTER Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $22,000 income taxes) Net income $450,000 196,000 254,000 98,000 $ 156,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market price of Myers stock was $12.24...
*Exercise 9-11 Here is the income statement for Myers, Inc. MYERS, INC. Income Statement For the Year Ended December 31, 2017 Sales revenue $400,000 Cost of goods sold 230,000 Gross profit 170,000 Expenses (including $16,000 interest and $24,000 income taxes) 98,000 Net income $72,000 Additional information: Common stock outstanding January 1, 2017, was 32,000 shares, and 40,000 shares were outstanding at December 31, 2017. 2. The market price of Myers stock was $14 in 2017. 3. Cash dividends of $21,000...
Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $23,000 income taxes) Net income $430,000 200,000 230,000 96,000 $ 134,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market price of Myers stock was $11.43 in 2020. Cash dividends of $28,140 were paid, $7,000 of which were to preferred...
Question 6 x Your answer is incorrect. Try again. Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $21,500 income taxes) Net income $408,000 218,000 190,000 84,000 $ 106,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market price of Myers...
Help me solve this
Exercise 18-11 Your answer is incorrect. Try again. Here is the income statement for Myers, Inc. Myers, Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue Cost of goods sold Gross profit Expenses (including $10,000 interest and $30,000 income taxes) Net income $404,000 186,000 218,000 98,000 $ 120,000 Additional information: 1. 2. 3. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020. The market...
Here is the income statement for Metlock, Inc. METLOCK, INC. Income Statement For the Year Ended December 31, 2022 Sales revenue $446,200 Cost of goods sold 211,400 Gross profit 234,800 Expenses (including $16,400 interest and $28,500 income taxes) 76,100 $ 158,700 Net income Additional information: 1. Common stock outstanding January 1, 2022, was 29.400 shares, and 36,500 shares were outstanding at December 31, 2022. 2. The market price of Metlock stock was $13 in 2022 3. Cash dividends of $24,300...
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