The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 65 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $1,173,375 $995,425 Net income 259,200 203,900 Total $1,432,575 $1,199,325 Dividends: On preferred stock $8,400 $8,400 On common stock 17,550 17,550 Total dividends $25,950 $25,950 Retained earnings, December 31 $1,406,625 $1,173,375 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,622,790 $1,495,130 Cost of goods sold 611,010 562,130 Gross profit $1,011,780 $933,000 Selling expenses $341,930 $416,290 Administrative expenses 291,280 244,490 Total operating expenses $633,210 $660,780 Income from operations $378,570 $272,220 Other revenue 19,930 17,380 $398,500 $289,600 Other expense (interest) 104,000 57,600 Income before income tax $294,500 $232,000 Income tax expense 35,300 28,100 Net income $259,200 $203,900 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $329,810 $258,110 Marketable securities 499,170 427,720 Accounts receivable (net) 292,000 277,400 Inventories 219,000 175,200 Prepaid expenses 62,398 51,620 Total current assets $1,402,378 $1,190,050 Long-term investments 549,210 191,506 Property, plant, and equipment (net) 1,690,000 1,521,000 Total assets $3,641,588 $2,902,556 Liabilities Current liabilities $424,963 $499,181 Long-term liabilities: Mortgage note payable, 8% $580,000 $0 Bonds payable, 8% 720,000 720,000 Total long-term liabilities $1,300,000 $720,000 Total liabilities $1,724,963 $1,219,181 Stockholders' Equity Preferred $0.70 stock, $20 par $240,000 $240,000 Common stock, $10 par 270,000 270,000 Retained earnings 1,406,625 1,173,375 Total stockholders' equity $1,916,625 $1,683,375 Total liabilities and stockholders' equity $3,641,588 $2,902,556 Required: Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. Return on total assets % 13. Return on stockholders’ equity % 14. Return on common stockholders’ equity

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 65 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $1,173,375 $995,425 Net income 259,200 203,900 Total $1,432,575 $1,199,325 Dividends: On preferred stock $8,400 $8,400 On common stock 17,550 17,550 Total dividends $25,950 $25,950 Retained earnings, December 31 $1,406,625 $1,173,375 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,622,790 $1,495,130 Cost of goods sold 611,010 562,130 Gross profit $1,011,780 $933,000 Selling expenses $341,930 $416,290 Administrative expenses 291,280 244,490 Total operating expenses $633,210 $660,780 Income from operations $378,570 $272,220 Other revenue 19,930 17,380 $398,500 $289,600 Other expense (interest) 104,000 57,600 Income before income tax $294,500 $232,000 Income tax expense 35,300 28,100 Net income $259,200 $203,900 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $329,810 $258,110 Marketable securities 499,170 427,720 Accounts receivable (net) 292,000 277,400 Inventories 219,000 175,200 Prepaid expenses 62,398 51,620 Total current assets $1,402,378 $1,190,050 Long-term investments 549,210 191,506 Property, plant, and equipment (net) 1,690,000 1,521,000 Total assets $3,641,588 $2,902,556 Liabilities Current liabilities $424,963 $499,181 Long-term liabilities: Mortgage note payable, 8% $580,000 $0 Bonds payable, 8% 720,000 720,000 Total long-term liabilities $1,300,000 $720,000 Total liabilities $1,724,963 $1,219,181 Stockholders' Equity Preferred $0.70 stock, $20 par $240,000 $240,000 Common stock, $10 par 270,000 270,000 Retained earnings 1,406,625 1,173,375 Total stockholders' equity $1,916,625 $1,683,375 Total liabilities and stockholders' equity $3,641,588 $2,902,556 Required: Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. Return on total assets % 13. Return on stockholders’ equity % 14. Return on common stockholders’ equity

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 4PA: Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall...

See similar textbooks

Related questions

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 $ 65 on December 31, 20Y2.

Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1
Retained earnings, January 1	$1,173,375		$995,425
Net income	259,200		203,900
Total	$1,432,575		$1,199,325
Dividends:
	On preferred stock	$8,400		$8,400
	On common stock	17,550		17,550
		Total dividends	$25,950		$25,950
Retained earnings, December 31	$1,406,625		$1,173,375

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1
Sales	$1,622,790		$1,495,130
Cost of goods sold	611,010		562,130
Gross profit	$1,011,780		$933,000
Selling expenses	$341,930		$416,290
Administrative expenses	291,280		244,490
Total operating expenses	$633,210		$660,780
Income from operations	$378,570		$272,220
Other revenue	19,930		17,380
	$398,500		$289,600
Other expense (interest)	104,000		57,600
Income before income tax	$294,500		$232,000
Income tax expense	35,300		28,100
Net income	$259,200		$203,900

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
	20Y2	20Y1
Assets
Current assets
	Cash	$329,810		$258,110
	Marketable securities	499,170		427,720
	Accounts receivable (net)	292,000		277,400
	Inventories	219,000		175,200
	Prepaid expenses	62,398		51,620
		Total current assets	$1,402,378		$1,190,050
Long-term investments	549,210		191,506
Property, plant, and equipment (net)	1,690,000		1,521,000
Total assets	$3,641,588		$2,902,556
Liabilities
Current liabilities	$424,963		$499,181
Long-term liabilities:
	Mortgage note payable, 8%	$580,000		$0
	Bonds payable, 8%	720,000		720,000
		Total long-term liabilities	$1,300,000		$720,000
Total liabilities	$1,724,963		$1,219,181
Stockholders' Equity
Preferred $0.70 stock, $20 par	$240,000		$240,000
Common stock, $10 par	270,000		270,000
Retained earnings	1,406,625		1,173,375
Total stockholders' equity	$1,916,625		$1,683,375
Total liabilities and stockholders' equity	$3,641,588		$2,902,556

Required:

Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.

Return on total assets		%
13. Return on stockholders’ equity		%
14. Return on common stockholders’ equity

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.