In 2022, Pennington Corporation 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 corporation declared preferred dividends of $15,000 in 2022, and its average common stockholders’ equity during the year was $200,000.

Instructions

a. Prepare a multiple-step income statement for Pennington Corporation.

b. Compute Pennington Corporation’s return on common stockholders’ equity for 2022.