Celtic Arts, Inc., earned $50,000 in 2007 and $80,000 in 2008. The company began operations on January
Question:
Celtic Arts, Inc., earned $50,000 in 2007 and $80,000 in 2008. The company began operations on January 1, 2007, with a $600,000 investment by stockholders and no debt. On June 30, 2008, the company borrowed $1,000,000 from a bank, payable in 10 years.
a. Determine the rate earned on total assets and the rate earned on total stockholders’ equity for 2007. Round to two decimal places.
b. Determine the rate earned on total assets for 2008. Round to two decimal places.
c. Use the leverage formula to determine the rate earned on stockholders’ equity for 2008.
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Changes in balances of stockholders equity and total assets Stockholders Equity Assets January 1 200...View the full answer
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Related Book For 
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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