Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y 1 20Υ2 20Υ1 Retained earnings, January 1 $5,375,000 $4,545,000 Net income . 900,000 925,000 Total .... $6,275,000 $5,470,000 Dividends: Preferred stock dividends... Common stock dividends.. Total dividends ..... $ 45,000 $ 45,000 50,000 50,000 $ 95,000 $ 95,000 Retained earnings, December 31 $6,180,000 $5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Sales $10,000,000 $9,400,000 Cost of goods sold. Gross profit Selling expenses. Administrative expenses. Total operating expenses Income from operations 5,350,000 $ 4,650,000 $ 2,000,000 4,950,000 $4,450,000 $1,880,000 1,410,000 $3,290,000 $1,160,000 1,500,000 $ 3,500,000 $ 1,150,000 Other revenue 150,000 140,000 $ 1300,000 $1,300,000 Other expense (interest) 170,000 $ 1,130,000 150,000 $1,150,000 Income before income tax Income tax expense. 230,000 225,000 Net income $ 900,000 $ 925,000 Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Υ1 Assets Current assets: $ 500,000 1,010,000 740,000 $ 400,000 Cash Marketable securities. 1,000,000 Accounts receivable (net) 510,000 Inventories. 1,190,000 250,000 $3,690,000 950,000 229,000 $3,089,000 2,300,000 Prepaid expenses Total current assets. Long-term investments Property, plant, and equipment (net) 2350,000 3,740,000 3,366,000 Total assets. $9,780,000 $8,755,000 Llabilities $ 900,000 $ 880,000 Current liabilities Long-term liabilities: Mortgage note payable, 10%. Bonds payable, 10%.. Total long-term liabilities $ 200,000 1500,000 $1,700,000 $2,600,000 1,500,000 $1,500,000 $2,380,000 Total liabilities Stockholders' Equity Preferred $0.90 stock, $10 par Common stock, $5 par. Retained earnings. Total stockholders' equity Total liabilities and stockholders'equity. $ 500,000 500,000 6,180,000 $7,180,000 $ 500,000 500,000 5,375,000 $6,375,000 $9,780,000 $8,755,000

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 38MCQ

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Question

The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2.

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Instructions
Determine the following measures for 20Y2, rounding to one decimal place including percentages, except for per-share amounts:
1. Working capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days’ sales in receivables
6. Inventory turnover
7. Number of days’ sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders’ equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders’ equity
14. Return on common stockholders’ equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield

Stargel Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y 1
20Υ2
20Υ1
Retained earnings, January 1
$5,375,000
$4,545,000
Net income .
900,000
925,000
Total ....
$6,275,000
$5,470,000
Dividends:
Preferred stock dividends...
Common stock dividends..
Total dividends .....
$ 45,000
$ 45,000
50,000
50,000
$ 95,000
$ 95,000
Retained earnings, December 31
$6,180,000
$5,375,000

Stargel Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Υ2
20Υ1
Sales
$10,000,000
$9,400,000
Cost of goods sold.
Gross profit
Selling expenses.
Administrative expenses.
Total operating expenses
Income from operations
5,350,000
$ 4,650,000
$ 2,000,000
4,950,000
$4,450,000
$1,880,000
1,410,000
$3,290,000
$1,160,000
1,500,000
$ 3,500,000
$ 1,150,000
Other revenue
150,000
140,000
$ 1300,000
$1,300,000
Other expense (interest)
170,000
$ 1,130,000
150,000
$1,150,000
Income before income tax
Income tax expense.
230,000
225,000
Net income
$ 900,000
$ 925,000
Stargel Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y2
20Υ1
Assets
Current assets:
$ 500,000
1,010,000
740,000
$ 400,000
Cash
Marketable securities.
1,000,000
Accounts receivable (net)
510,000
Inventories.
1,190,000
250,000
$3,690,000
950,000
229,000
$3,089,000
2,300,000
Prepaid expenses
Total current assets.
Long-term investments
Property, plant, and equipment (net)
2350,000
3,740,000
3,366,000
Total assets.
$9,780,000
$8,755,000
Llabilities
$ 900,000
$ 880,000
Current liabilities
Long-term liabilities:
Mortgage note payable, 10%.
Bonds payable, 10%..
Total long-term liabilities
$ 200,000
1500,000
$1,700,000
$2,600,000
1,500,000
$1,500,000
$2,380,000
Total liabilities
Stockholders' Equity
Preferred $0.90 stock, $10 par
Common stock, $5 par.
Retained earnings.
Total stockholders' equity
Total liabilities and stockholders'equity.
$ 500,000
500,000
6,180,000
$7,180,000
$ 500,000
500,000
5,375,000
$6,375,000
$9,780,000
$8,755,000

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