The condensed financial statements of Marks Company for the years 2017-2018 are presented below: Marks Company Comparative Balance Sheets As of December 31, 2017 and 2018 2018 2017 Cash $404,000 $155,000 Accounts receivable (net) 356,000 300,000 Inventories 375,000 339,000 Plant and equipment 1,830,000 1,121,000 Accumulated depreciation (260,000 ) (193,000 ) $2,705,000 $1,722,000 Accounts payable $339,000 $164,000 Dividends payable -0- 45,000 Bonds payable 405,000 -0- Common stock ($10 par) 1,521,000 1,230,000 Retained earnings 440,000 283,000 $2,705,000 $1,722,000 Additional data: Market value of stock at 12/31/18 is $80 per share. Marks sold 30,000 shares of common stock at par on July 1, 2018. Marks Company Condensed Income Statement For the Year Ended December 31, 2018 Sales revenue $2,420,000 Cost of goods sold 1,642,000 Gross profit 778,000 Administrative and selling expenses 500,000 Net income $278,000 Compute the following financial ratios by placing the proper amounts for numerators and denominators. (f) Earnings per share in 2018 $ (g) Return on common stock holders’ equity in 2018 $ $ (h) Price earnings ratio at 12/31/18 $ $ (i) Debt to assets at 12/31/18 $ $ (j) Book value per share at 12/31/18

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 18E

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The condensed financial statements of Marks Company for the years 2017-2018 are presented below:

Marks Company Comparative Balance Sheets As of December 31, 2017 and 2018
	2018		2017
Cash	$404,000			$155,000
Accounts receivable (net)	356,000			300,000
Inventories	375,000			339,000
Plant and equipment	1,830,000			1,121,000
Accumulated depreciation	(260,000	)		(193,000	)
	$2,705,000			$1,722,000
Accounts payable	$339,000			$164,000
Dividends payable	-0-			45,000
Bonds payable	405,000			-0-
Common stock ($10 par)	1,521,000			1,230,000
Retained earnings	440,000			283,000
	$2,705,000			$1,722,000

Additional data:
	Market value of stock at 12/31/18 is $80 per share.
	Marks sold 30,000 shares of common stock at par on July 1, 2018.

Marks Company Condensed Income Statement For the Year Ended December 31, 2018
Sales revenue		$2,420,000
Cost of goods sold		1,642,000
Gross profit		778,000
Administrative and selling expenses		500,000
Net income		$278,000

Compute the following financial ratios by placing the proper amounts for numerators and denominators.

(f)

Earnings per share in 2018

(g)

Return on common stock holders’ equity in 2018

(h)

Price earnings ratio at 12/31/18

(i)

Debt to assets at 12/31/18

(j)

Book value per share at 12/31/18

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