The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 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 $3,609,825 $3,039,675 Net income 772,800 622,600 Dividends: On preferred stock (13,300) (13,300) On common stock (39,150) (39,150) Retained earnings, December 31 $4,330,175 $3,609,825 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $5,014,005 $4,619,600 Cost of merchandise sold 1,696,520 1,560,800 Gross profit $3,317,485 $3,058,800 Selling expenses $1,172,660 $1,400,700 Administrative expenses 998,935 822,630 Total operating expenses $2,171,595 $2,223,330 Income from operations $1,145,890 $835,470 Other revenue and expense: Other revenue 60,310 53,330 Other expense (interest) (328,000) (180,800) Income before income tax expense $878,200 $708,000 Income tax expense 105,400 85,400 Net income $772,800 $622,600 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $907,950 $687,900 Marketable securities 1,374,190 1,139,950 Accounts receivable (net) 905,200 854,100 Inventories 686,200 525,600 Prepaid expenses 171,766 137,580 Total current assets $4,045,306 $3,345,130 Long-term investments 1,949,027 16,723 Property, plant, and equipment (net) 5,330,000 4,797,000 Total assets $11,324,333 $8,158,853 Liabilities Current liabilities $1,264,158 $659,028 Long-term liabilities: Mortgage note payable, 8% $1,840,000 $0 Bonds payable, 8% 2,260,000 2,260,000 Total long-term liabilities $4,100,000 $2,260,000 Total liabilities $5,364,158 $2,919,028 Stockholders' Equity Preferred $0.70 stock, $40 par $760,000 $760,000 Common stock, $10 par 870,000 870,000 Retained earnings 4,330,175 3,609,825 Total stockholders' equity $5,960,175 $5,239,825 Total liabilities and stockholders' equity $11,324,333 $8,158,853 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. 13. Return on stockholders’ equity fill in the blank 13 % 14. Return on common stockholders’ equity fill in the blank 14 % 15. Earnings per share on common stock $fill in the blank 15

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 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 $3,609,825 $3,039,675 Net income 772,800 622,600 Dividends: On preferred stock (13,300) (13,300) On common stock (39,150) (39,150) Retained earnings, December 31 $4,330,175 $3,609,825 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $5,014,005 $4,619,600 Cost of merchandise sold 1,696,520 1,560,800 Gross profit $3,317,485 $3,058,800 Selling expenses $1,172,660 $1,400,700 Administrative expenses 998,935 822,630 Total operating expenses $2,171,595 $2,223,330 Income from operations $1,145,890 $835,470 Other revenue and expense: Other revenue 60,310 53,330 Other expense (interest) (328,000) (180,800) Income before income tax expense $878,200 $708,000 Income tax expense 105,400 85,400 Net income $772,800 $622,600 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $907,950 $687,900 Marketable securities 1,374,190 1,139,950 Accounts receivable (net) 905,200 854,100 Inventories 686,200 525,600 Prepaid expenses 171,766 137,580 Total current assets $4,045,306 $3,345,130 Long-term investments 1,949,027 16,723 Property, plant, and equipment (net) 5,330,000 4,797,000 Total assets $11,324,333 $8,158,853 Liabilities Current liabilities $1,264,158 $659,028 Long-term liabilities: Mortgage note payable, 8% $1,840,000 $0 Bonds payable, 8% 2,260,000 2,260,000 Total long-term liabilities $4,100,000 $2,260,000 Total liabilities $5,364,158 $2,919,028 Stockholders' Equity Preferred $0.70 stock, $40 par $760,000 $760,000 Common stock, $10 par 870,000 870,000 Retained earnings 4,330,175 3,609,825 Total stockholders' equity $5,960,175 $5,239,825 Total liabilities and stockholders' equity $11,324,333 $8,158,853 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. 13. Return on stockholders’ equity fill in the blank 13 % 14. Return on common stockholders’ equity fill in the blank 14 % 15. Earnings per share on common stock $fill in the blank 15

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...

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Measures of liquidity, Solvency, and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 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	$3,609,825		$3,039,675
Net income	772,800		622,600
Dividends:
	On preferred stock	(13,300)		(13,300)
	On common stock	(39,150)		(39,150)
Retained earnings, December 31	$4,330,175		$3,609,825

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1
Sales	$5,014,005		$4,619,600
Cost of merchandise sold	1,696,520		1,560,800
Gross profit	$3,317,485		$3,058,800
Selling expenses	$1,172,660		$1,400,700
Administrative expenses	998,935		822,630
Total operating expenses	$2,171,595		$2,223,330
Income from operations	$1,145,890		$835,470
Other revenue and expense:
Other revenue	60,310		53,330
Other expense (interest)	(328,000)		(180,800)
Income before income tax expense	$878,200		$708,000
Income tax expense	105,400		85,400
Net income	$772,800		$622,600

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
	20Y2	20Y1
Assets
Current assets:
	Cash	$907,950		$687,900
	Marketable securities	1,374,190		1,139,950
	Accounts receivable (net)	905,200		854,100
	Inventories	686,200		525,600
	Prepaid expenses	171,766		137,580
		Total current assets	$4,045,306		$3,345,130
Long-term investments	1,949,027		16,723
Property, plant, and equipment (net)	5,330,000		4,797,000
Total assets	$11,324,333		$8,158,853
Liabilities
Current liabilities	$1,264,158		$659,028
Long-term liabilities:
	Mortgage note payable, 8%	$1,840,000		$0
	Bonds payable, 8%	2,260,000		2,260,000
		Total long-term liabilities	$4,100,000		$2,260,000
Total liabilities	$5,364,158		$2,919,028
Stockholders' Equity
Preferred $0.70 stock, $40 par	$760,000		$760,000
Common stock, $10 par	870,000		870,000
Retained earnings	4,330,175		3,609,825
Total stockholders' equity	$5,960,175		$5,239,825
Total liabilities and stockholders' equity	$11,324,333		$8,158,853

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.













13. Return on stockholders’ equity	fill in the blank 13	%
14. Return on common stockholders’ equity	fill in the blank 14	%
15. Earnings per share on common stock	$fill in the blank 15
16. Price-earnings ratio	fill in the blank 16
17. Dividends per share of common stock	$fill in the blank 17
18. Dividend yield	fill in the blank 18	%

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