The following information was obtained from the records of Shae Inc.: Merchandise inventory Notes payable (long-term) Net sales Buildings and equipment Selling, general, and administrative expenses Accounts receivable Common stock (30,000 shares) Income tax expense Cash Retained earnings, 1/1/19 Accrued liabilities Cost of goods sold Accumulated depreciation Interest expense Accounts payable Dividends declared and paid during 2019 $162,000 180,000 540,000 324,000 54,000 81,000 270,000 32,400 313,326 166,050 10,800 324,000 145,800 54,000 54,000 21,924 Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Shae Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e. b. What is the company's average income tax rate? C. What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year. d. What is the par value per share of common stock? e. What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?
The following information was obtained from the records of Shae Inc.: Merchandise inventory Notes payable (long-term) Net sales Buildings and equipment Selling, general, and administrative expenses Accounts receivable Common stock (30,000 shares) Income tax expense Cash Retained earnings, 1/1/19 Accrued liabilities Cost of goods sold Accumulated depreciation Interest expense Accounts payable Dividends declared and paid during 2019 $162,000 180,000 540,000 324,000 54,000 81,000 270,000 32,400 313,326 166,050 10,800 324,000 145,800 54,000 54,000 21,924 Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Shae Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e. b. What is the company's average income tax rate? C. What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year. d. What is the par value per share of common stock? e. What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.8MCP
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hello, just need help with REQA3 the ones in red
Transcribed Image Text:Help
The following information was obtained from the records of Shae Inc.:
Merchandise inventory
Notes payable (long-term)
Net sales
Buildings and equipment
Selling, general, and administrative expenses
Accounts receivable
Common stock (30,000 shares)
Income tax expense
Cash
Retained earnings, 1/1/19
Accrued liabilities
$162,000
180,000
540,000
324,000
54,000
81,000
270,000
32,400
313,326
166,050
10,800
324,000
145,800
54,000
54,000
21,924
Cost of goods sold
Accumulated depreciation
Interest expense
Accounts payable
Dividends declared and paid during 2019
Except as otherwise indicated, assume that all balance sheet items reflect account balances at Dećember 31, 2019, and that all income
statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital
during the year.
Required:
a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a
balance sheet at December 31, 2019, for Shae Inc. Based on the financial statements that you have prepared for part a, answer the
questions in parts b-e.
b. What is the company's average income tax rate?
C. What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the
average long-term debt account balance throughout the year.
d. What is the par value per share of common stock?
e. What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?
Complete this question by entering your answers in the tabs below.
Transcribed Image Text:SHAE INC.
Balance Sheet
December 31, 2019
Assets
Cash
Merchandise inventory
313,326 O
162,000
Accounts receivable
81,000
Additional paid-in capital
324,000 (х
Depreciation expense
145,800 X
Total current assets
$ 1,026,126
556,326 X
Total assets
$ 1,026,126
Liabilities
%24
10,800
Accrued liabilities
180,000 V
Notes payable (long term)
54,000
Accounts payable
244,800
Total liabilities
Stockholders' Equity
270,000
219,726
Retained earnings
$ 489,726
24
734,526
Total stockholders' equity
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