=+PR 17-3A Effect of transactions on current position analysis obj. 2

✔ 2.

c. Current ratio, 2.6 808 Chapter 17 Financial Statement Analysis The comparative financial statements of Optical Solutions Inc. are as follows. The market price of Optical Solutions Inc. common stock was $60.00 on December 31, 2010.

Optical Solutions Inc.

Comparative Retained Earnings Statement For the Years Ended December 31, 2010 and 2009 2010 2009 Retained earnings, January 1 . . . . . . . . . . . . $ 604,000 $306,000 Add net income for year . . . . . . . . . . . . . . . . 428,000 314,000 __________ _________ Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,032,000 $620,000 __________ _________ Deduct dividends:

On preferred stock . . . . . . . . . . . . . . . . . . $ 4,000 $ 4,000 On common stock . . . . . . . . . . . . . . . . . . 12,000 12,000 __________ _________ Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,000 $ 16,000 __________ _________ Retained earnings, December 31 . . . . . . . . . $1,016,000 $604,000 __________ _________ __________ _________