The balance sheets at the end of each of the first two years of operations indicate...
The balance sheets at the end of each of the first two years of
operations indicate the following:
| Year 2 | Year 1 | |
| Total current assets | $530,000 | $460,000 |
| Total investments | 60,000 | 40,000 |
| Total property, plant, and equipment | 900,000 | 700,000 |
| Total current liabilities | 150,000 | 80,000 |
| Total long-term liabilities | 350,000 | 250,000 |
| Common stock, $10 par | 600,000 | 600,000 |
| Paid-in capital in excess of par—common stock | 60,000 | 60,000 |
| Retained earnings | 330,000 | 210,000 |
If net income is $158,100 and interest expense is $30,000 for Year
2, what is the return on stockholders' equity for Year 2?
a.24.0%
b.17.0%
c.20.2%
d.16.0%
Homework Answers
Answer = B) 17.0%
Return on Stockholder's Equity
= Netincome / Averge Stockholder'sEquity
Netincome = $158,100
Average Stockholder's Equity = (Stokc Holders Equity in YEar 1 + Stockholders Equity in YEar 2 )/2
= (600,000+60,000+210,000+600,000+60,000+330,000)/ 2 = 1,860,000 / 2 = $930,000
ROE = 158,100 / 930,000 = 17% (Answer)
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The balance sheets at the end of each of the first two years of
operations indicate...
1. The balance sheets at the end of each of the first two years of operations...
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36 The balance sheets at the end of each of the first two years of operations...
36
The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $616,300 $580,600 Total investments 62,300 49,800 Total property, plant, and equipment 879,300 696,300 Total current liabilities 103,400 84,700 Total long-term liabilities 296,400 227,600 Preferred 9% stock, $100 par 94,700 94,700 Common stock, $10 par 518,100 518,100 Paid-in capital in excess of par-Common stock 66,600 66,600 Retained earnings 478,700 335,000 Using the balance...
1. prepare a vertical analysis of Sports Unlimited's 2018 and 2017 balance sheets. Express each amount...
1. prepare a vertical analysis of Sports Unlimited's
2018 and 2017 balance sheets. Express each amount as a percentage
of total assets for that year. (Amounts to be deducted should be
indicated by a minus sign. Round your answer to 1 decimal
place.)
2. Prepare a horizontal analysis of Sports Unlimited's
2018 balance sheet using 2017 as the base year. (Negative amounts
and Decreases should be indicated by a minus sign. Round your
percentage answers to 1 decimal place.)
SPORTS...
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The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $619,800 $579,300 Total investments 69,500 40,000 Total property, plant, and equipment 888,700 783,200 Total current liabilities 112,200 85,900 Total long-term liabilities 307,400 243,200 Preferred 9% stock, $100 par 90,600 90,600 Common stock, $10 par 576,600 576,600 68,000 68,000 Paid-in capital in excess of par-Common stock Retained earnings 423,200 343,200 Using the balance sheets...
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36
The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $616,300 $580,600 Total investments 62,300 49,800 Total property, plant, and equipment 879,300 696,300 Total current liabilities 103,400 84,700 Total long-term liabilities 296,400 227,600 Preferred 9% stock, $100 par 94,700 94,700 Common stock, $10 par 518,100 518,100 Paid-in capital in excess of par-Common stock 66,600 66,600 Retained earnings 478,700 335,000 Using the balance...
1. prepare a vertical analysis of Sports Unlimited's
2018 and 2017 balance sheets. Express each amount as a percentage
of total assets for that year. (Amounts to be deducted should be
indicated by a minus sign. Round your answer to 1 decimal
place.)
2. Prepare a horizontal analysis of Sports Unlimited's
2018 balance sheet using 2017 as the base year. (Negative amounts
and Decreases should be indicated by a minus sign. Round your
percentage answers to 1 decimal place.)
SPORTS...
Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid-in capital in excess of parCommon stock Retained earnings Year 2 $600.000 50.000 900,000 35.000 350,000 100.000 600.000 75.000 310,000 Year 1 $580.000 40.000 700.000 65,000 250.000 100,000 600.000 75.000 210,000 Using the balance sheets for Kellman Company, if net income is $250,000 and interest expense is $20,000 for Year and the market...
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