Time Remaining 2 hours 32 minutes 36 seconds

02:32:36

Item 1

Time Remaining 2 hours 32 minutes 36 seconds

02:32:36

The information on the following page was obtained from the records of Breanna Inc.:


Accounts receivable	$	10,700
Accumulated depreciation		50,800
Cost of goods sold		123,000
Income tax expense		8,000
Cash		62,000
Net sales		201,000
Equipment		128,000
Selling, general, and administrative expenses		32,000
Common stock (8,700 shares)		90,000
Accounts payable		14,300
Retained earnings, 1/1/19		30,000
Interest expense		5,600
Merchandise inventory		38,600
Long-term debt		38,000
Dividends declared and paid during 2019		16,200

Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year.

Required:

Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Breanna Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e.
What is the company's average income tax rate?
What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.
What is the par value per share of common stock?
What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?

Expert Solution

Step 1

“Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for you. To get remaining sub-part solved please repost the complete question and mention the sub-parts to be solved.”.