In 2014, Pennington Corporation had net sales of $600,000 and cost of goods sold of $360,000. Operating

Question:

In 2014, Pennington had net sales of $600,000 and cost of goods sold of $360,000. Operating expenses were $153,000, and interest expense was $7,500. The corporation’s tax rate is 30%. The declared preferred dividends of $15,000 in 2014, and its average common stockholders’ equity during the year was $200,000.

Instructions
(a) Prepare an income statement for Pennington Compute Pennington Corporation’s return on common stockholders’ equity for 2014.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...