Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31,20Y2 and 20Y1 20Y2 20Υ1 Retained earnings, January 1 $3,704,000 s3,264,000 Net income 600,000 550,000 Total $4,304,000 $3,814,000 Dividends: On preferred stock s 10,000 s 10,000 On common stock 100,000 100,000 s 110,000 s 110,000 Total dividends Retained earnings, December 31 84,194,000 s3,704,000 Sales $10,850,000 s10,000,000 Cost of goods sold 6,000,000 5,450,000 Gross profit $ 4,850,000 s 4,550,000 Selling expenses $ 2,170,000 s 2,000,000 Administrative expenses 1,627,500 1,500,000 Total operating expenses $ 3,797,500 s 3,500,000 Income from operations $ 1,052,500 s 1,050,000 Other income 99,500 20,000 $ 1,152,000 s 1,070,000 Other expense (interest) 132,000 120,000 Income before income tax $ 1,020,000 s 950,000 Income tax expense | 420,000 400,000 $ 600,000 $ 550,000 Net income Marshall Inc. Comparative Balance Sheet December 31,20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $1,050,000 s 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 88,254,000 Liabilities Current liabilities S 880,000 S 800,000 Long-term liabilities: Mortgage note payable. 6% $ 200,000 so Bonds payable. 4%, 3,000,000 3,000,000 Total long term liabilities $ 3,200,000 s3,000,000 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 84,454,000 Total liabilities and stockholders' equity $ 9,024,000 S8,254,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 15E

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Question

Measures of liquidity, solvency, and profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.

Instructions
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):
1. Working capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
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

Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31,20Y2 and 20Y1
20Y2
20Υ1
Retained earnings, January 1
$3,704,000 s3,264,000
Net income
600,000
550,000
Total
$4,304,000 $3,814,000
Dividends:
On preferred stock
s 10,000
s 10,000
On common stock
100,000
100,000
s 110,000
s 110,000
Total dividends
Retained earnings, December 31 84,194,000 s3,704,000
Sales
$10,850,000 s10,000,000
Cost of goods sold
6,000,000
5,450,000
Gross profit
$ 4,850,000 s 4,550,000
Selling expenses
$ 2,170,000 s 2,000,000
Administrative expenses
1,627,500 1,500,000
Total operating expenses
$ 3,797,500 s 3,500,000
Income from operations
$ 1,052,500 s 1,050,000
Other income
99,500
20,000
$ 1,152,000 s 1,070,000
Other expense (interest)
132,000
120,000
Income before income tax
$ 1,020,000 s 950,000
Income tax expense
| 420,000
400,000
$ 600,000
$ 550,000
Net income

Marshall Inc.
Comparative Balance Sheet
December 31,20Y2 and 20Y1
20Y2
20Y1
Assets
Current assets:
Cash
$1,050,000 s 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 88,254,000
Liabilities
Current liabilities
S 880,000
S 800,000
Long-term liabilities:
Mortgage note payable. 6%
$ 200,000 so
Bonds payable. 4%,
3,000,000
3,000,000
Total long term liabilities
$ 3,200,000 s3,000,000
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 84,454,000
Total liabilities and stockholders' equity $ 9,024,000 S8,254,000

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