The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,071,200 $2,584,300 Net income 720,000 529,300 Total $3,791,200 $3,113,600 Dividends: On preferred stock $9,100 $9,100 On common stock 33,300 33,300 Total dividends $42,400 $42,400 Retained earnings, December 31 $3,748,800 $3,071,200 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,479,280 $4,126,940 Cost of goods sold 1,503,070 1,382,820 Gross profit $2,976,210 $2,744,120 Selling expenses $1,043,780 $1,281,450 Administrative expenses 889,140 752,590 Total operating expenses $1,932,920 $2,034,040 Income from operations $1,043,290 $710,080 Other revenue 54,910 45,320 $1,098,200 $755,400 Other expense (interest) 280,000 154,400 Income before income tax $818,200 $601,000 Income tax expense 98,200 71,700 Net income $720,000 $529,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Assets Current assets Cash $785,200 $744,940 Marketable securities 1,188,410 1,234,470 Accounts receivable (net) 781,100 737,300 Inventories 584,000 452,600 Prepaid expenses 148,542 148,990 Total current assets $3,487,252 $3,318,300 Long-term investments 2,076,468 995,123 Property, plant, and equipment (net) 4,200,000 3,780,000 Total assets $9,763,720 $8,093,423 Liabilities Current liabilities $1,124,920 $1,702,223 Long-term liabilities: Mortgage note payable, 8% $1,570,000 $0 Bonds payable, 8% 1,930,000 1,930,000 Total long-term liabilities $3,500,000 $1,930,000 Total liabilities $4,624,920 $3,632,223 Stockholders' Equity Preferred $0.70 stock, $50 par $650,000 $650,000 Common stock, $10 par 740,000 740,000 Retained earnings 3,748,800 3,071,200 Total stockholders' equity $5,138,800 $4,461,200 Total liabilities and stockholders' equity $9,763,720 $8,093,423 Required:

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,071,200 $2,584,300 Net income 720,000 529,300 Total $3,791,200 $3,113,600 Dividends: On preferred stock $9,100 $9,100 On common stock 33,300 33,300 Total dividends $42,400 $42,400 Retained earnings, December 31 $3,748,800 $3,071,200 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,479,280 $4,126,940 Cost of goods sold 1,503,070 1,382,820 Gross profit $2,976,210 $2,744,120 Selling expenses $1,043,780 $1,281,450 Administrative expenses 889,140 752,590 Total operating expenses $1,932,920 $2,034,040 Income from operations $1,043,290 $710,080 Other revenue 54,910 45,320 $1,098,200 $755,400 Other expense (interest) 280,000 154,400 Income before income tax $818,200 $601,000 Income tax expense 98,200 71,700 Net income $720,000 $529,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Assets Current assets Cash $785,200 $744,940 Marketable securities 1,188,410 1,234,470 Accounts receivable (net) 781,100 737,300 Inventories 584,000 452,600 Prepaid expenses 148,542 148,990 Total current assets $3,487,252 $3,318,300 Long-term investments 2,076,468 995,123 Property, plant, and equipment (net) 4,200,000 3,780,000 Total assets $9,763,720 $8,093,423 Liabilities Current liabilities $1,124,920 $1,702,223 Long-term liabilities: Mortgage note payable, 8% $1,570,000 $0 Bonds payable, 8% 1,930,000 1,930,000 Total long-term liabilities $3,500,000 $1,930,000 Total liabilities $4,624,920 $3,632,223 Stockholders' Equity Preferred $0.70 stock, $50 par $650,000 $650,000 Common stock, $10 par 740,000 740,000 Retained earnings 3,748,800 3,071,200 Total stockholders' equity $5,138,800 $4,461,200 Total liabilities and stockholders' equity $9,763,720 $8,093,423 Required:

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,071,200 $2,584,300 Net income 720,000 529,300 Total $3,791,200 $3,113,600 Dividends: On preferred stock $9,100 $9,100 On common stock 33,300 33,300 Total dividends $42,400 $42,400 Retained earnings, December 31 $3,748,800 $3,071,200 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,479,280 $4,126,940 Cost of goods sold 1,503,070 1,382,820 Gross profit $2,976,210 $2,744,120 Selling expenses $1,043,780 $1,281,450 Administrative expenses 889,140 752,590 Total operating expenses $1,932,920 $2,034,040 Income from operations $1,043,290 $710,080 Other revenue 54,910 45,320 $1,098,200 $755,400 Other expense (interest) 280,000 154,400 Income before income tax $818,200 $601,000 Income tax expense 98,200 71,700 Net income $720,000 $529,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Assets Current assets Cash $785,200 $744,940 Marketable securities 1,188,410 1,234,470 Accounts receivable (net) 781,100 737,300 Inventories 584,000 452,600 Prepaid expenses 148,542 148,990 Total current assets $3,487,252 $3,318,300 Long-term investments 2,076,468 995,123 Property, plant, and equipment (net) 4,200,000 3,780,000 Total assets $9,763,720 $8,093,423 Liabilities Current liabilities $1,124,920 $1,702,223 Long-term liabilities: Mortgage note payable, 8% $1,570,000 $0 Bonds payable, 8% 1,930,000 1,930,000 Total long-term liabilities $3,500,000 $1,930,000 Total liabilities $4,624,920 $3,632,223 Stockholders' Equity Preferred $0.70 stock, $50 par $650,000 $650,000 Common stock, $10 par 740,000 740,000 Retained earnings 3,748,800 3,071,200 Total stockholders' equity $5,138,800 $4,461,200 Total liabilities and stockholders' equity $9,763,720 $8,093,423 Required:

Cornerstones of Financial Accounting

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 82E

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Measures of liquidity

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Υ2
20Υ1
Retained earnings, January 1
$3,071,200
$2,584,300
Net income
720,000
529,300
Total
$3,791,200
$3,113,600
Dividends:
On preferred stock
$9,100
$9,100
On common stock
33,300
33,300
Total dividends
$42,400
$42,400
Retained earnings, December 31
$3,748,800
$3,071,200
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Υ2
20Y1
Sales
$4,479,280
$4,126,940
Cost of goods sold
1,503,070
1,382,820
Gross profit
$2,976,210
$2,744,120
Selling expenses
$1,043,780
$1,281,450
Administrative expenses
889,140
752,590
Total operating expenses
$1,932,920
$2,034,040
Income from operations
$1,043,290
$710,080
Other revenue
54,910
45,320
$1,098,200
$755,400
Other expense (interest)
280,000
154,400
Income before income tax
$818,200
$601,000
Income tax expense
98,200
71,700
Net income
$720,000
$529,300
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Υ2
20Υ1
Assets
Current assets
Cash
$785,200
$744,940
Marketable securities
1,188,410
1,234,470
Accounts receivable (net)
781,100
737,300
Inventories
584,000
452,600
Prepaid expenses
148,542
148,990
Total current assets
$3,487,252
$3,318,300
Long-term investments
2,076,468
995,123
Property, plant, and equipment (net)
4,200,000
3,780,000
Total assets
$9,763,720
$8,093,423
Liabilities
Current liabilities
$1,124,920
$1,702,223
Long-term liabilities:
Mortgage note payable, 8%
$1,570,000
$0
Bonds payable, 8%
1,930,000
1,930,000
Total long-term liabilities
$3,500,000
$1,930,000
Total liabilities
$4,624,920
$3,632,223
Stockholders' Equity
Preferred $0.70 stock, $50 par
$650,000
$650,000
Common stock, $10 par
740,000
740,000
Retained earnings
3,748,800
3,071,200
Total stockholders' equity
$5,138,800
$4,461,200
Total liabilities and stockholders' equity
$9,763,720
$8,093,423
Required:

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