Blossom Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2019 and 2020 follow. Blossom Medical Comparative Balance Sheet As of December 31 2020 2019 Assets Current assets Cash $352,000 $417,400 Accounts receivable, net 1,000,000 776,400 Inventory 717,000 681,000 Other current assets 381,300 247,000 Total current assets 2,450,300 2,121,800 Property, plant, & equipment, net 8,766,170 8,440,100 Total assets $11,216,470 $10,561,900 Liabilities and Stockholders’ Equity Current liabilities $3,155,000 $2,846,000 Long-term debt 3,702,600 3,892,600 Total liabilities 6,857,600 6,738,600 Preferred stock, $5 par value 58,900 58,900 Common stock, $0.25 par value 104,600 103,800 Retained earnings 4,195,370 3,660,600 Total stockholders’ equity 4,358,870 3,823,300 Total liabilities and stockholders’ equity $11,216,470 $10,561,900 Blossom Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2020 2019 Sales revenue (all on account) $10,177,200 $9,613,900 Cost of goods sold 5,611,600 5,298,700 Gross profit 4,565,600 4,315,200 Operating expenses 2,840,200 2,634,100 Net operating income 1,725,400 1,681,100 Interest expense 300,300 308,600 Net income before taxes 1,425,100 1,372,500 Income taxes (30%) 427,530 411,750 Net income $997,570 $960,750 Dividends paid Preferred dividends 29,450 29,450 Common dividends 433,350 413,000 Total dividends paid 462,800 442,450 Net income retained 534,770 518,300 Retained earnings, beginning of year 3,660,600 3,142,300 Retained earnings, end of year $4,195,370 $3,660,600 (a) Calculate the earnings per share (average of 418,000 shares outstanding for the year) for 2020. (Round answer to 2 decimal places, e.g. 2.55.) Earning per share $enter the earning per share in dollars rounded to 2 decimal places per share eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) Calculate the price/earnings ratio (market price of $48 at year-end) for 2020. (Round answer to 1 decimal place, e.g. 2.5.) Price/earnings ratio enter the price to earnings ratio rounded to 1 decimal place eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) Calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. (Round answer to 1 decimal place, e.g. 2.5.) Dividend payout ratio enter the dividend payout ratio in percentages rounded to 1 decimal place %

Blossom Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2019 and 2020 follow. Blossom Medical Comparative Balance Sheet As of December 31 2020 2019 Assets Current assets Cash $352,000 $417,400 Accounts receivable, net 1,000,000 776,400 Inventory 717,000 681,000 Other current assets 381,300 247,000 Total current assets 2,450,300 2,121,800 Property, plant, & equipment, net 8,766,170 8,440,100 Total assets $11,216,470 $10,561,900 Liabilities and Stockholders’ Equity Current liabilities $3,155,000 $2,846,000 Long-term debt 3,702,600 3,892,600 Total liabilities 6,857,600 6,738,600 Preferred stock, $5 par value 58,900 58,900 Common stock, $0.25 par value 104,600 103,800 Retained earnings 4,195,370 3,660,600 Total stockholders’ equity 4,358,870 3,823,300 Total liabilities and stockholders’ equity $11,216,470 $10,561,900 Blossom Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2020 2019 Sales revenue (all on account) $10,177,200 $9,613,900 Cost of goods sold 5,611,600 5,298,700 Gross profit 4,565,600 4,315,200 Operating expenses 2,840,200 2,634,100 Net operating income 1,725,400 1,681,100 Interest expense 300,300 308,600 Net income before taxes 1,425,100 1,372,500 Income taxes (30%) 427,530 411,750 Net income $997,570 $960,750 Dividends paid Preferred dividends 29,450 29,450 Common dividends 433,350 413,000 Total dividends paid 462,800 442,450 Net income retained 534,770 518,300 Retained earnings, beginning of year 3,660,600 3,142,300 Retained earnings, end of year $4,195,370 $3,660,600 (a) Calculate the earnings per share (average of 418,000 shares outstanding for the year) for 2020. (Round answer to 2 decimal places, e.g. 2.55.) Earning per share $enter the earning per share in dollars rounded to 2 decimal places per share eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b) Calculate the price/earnings ratio (market price of $48 at year-end) for 2020. (Round answer to 1 decimal place, e.g. 2.5.) Price/earnings ratio enter the price to earnings ratio rounded to 1 decimal place eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) Calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. (Round answer to 1 decimal place, e.g. 2.5.) Dividend payout ratio enter the dividend payout ratio in percentages rounded to 1 decimal place %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(a)

Calculate the earnings per share (average of 418,000 shares outstanding for the year) for 2020. (Round answer to 2 decimal places, e.g. 2.55.)

Earning per share

$enter the earning per share in dollars rounded to 2 decimal places per share

eTextbook and Media

Save for Later

Attempts: 0 of 3 used

Submit Answer

(b)

Calculate the price/earnings ratio (market price of $48 at year-end) for 2020. (Round answer to 1 decimal place, e.g. 2.5.)

Price/earnings ratio

enter the price to earnings ratio rounded to 1 decimal place

eTextbook and Media

Save for Later

Attempts: 0 of 3 used

Submit Answer

(c)

Calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. (Round answer to 1 decimal place, e.g. 2.5.)

Dividend payout ratio

enter the dividend payout ratio in percentages rounded to 1 decimal place %

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Blossom Medical Comparative Balance Sheet As of December 31
	2020	2019
Assets
Current assets
Cash	$352,000	$417,400
Accounts receivable, net	1,000,000	776,400
Inventory	717,000	681,000
Other current assets	381,300	247,000
Total current assets	2,450,300	2,121,800
Property, plant, & equipment, net	8,766,170	8,440,100
Total assets	$11,216,470	$10,561,900

Liabilities and Stockholders’ Equity
Current liabilities	$3,155,000	$2,846,000
Long-term debt	3,702,600	3,892,600
Total liabilities	6,857,600	6,738,600
Preferred stock, $5 par value	58,900	58,900
Common stock, $0.25 par value	104,600	103,800
Retained earnings	4,195,370	3,660,600
Total stockholders’ equity	4,358,870	3,823,300
Total liabilities and stockholders’ equity	$11,216,470	$10,561,900

Blossom Medical Comparative Income Statement and Statement of Retained Earnings For the Year
	2020	2019
Sales revenue (all on account)	$10,177,200	$9,613,900
Cost of goods sold	5,611,600	5,298,700
Gross profit	4,565,600	4,315,200
Operating expenses	2,840,200	2,634,100
Net operating income	1,725,400	1,681,100
Interest expense	300,300	308,600
Net income before taxes	1,425,100	1,372,500
Income taxes (30%)	427,530	411,750
Net income	$997,570	$960,750
Dividends paid
Preferred dividends	29,450	29,450
Common dividends	433,350	413,000
Total dividends paid	462,800	442,450
Net income retained	534,770	518,300
Retained earnings, beginning of year	3,660,600	3,142,300
Retained earnings, end of year	$4,195,370	$3,660,600