Question
8...SunlandMedical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow. Comparative Balance Sheet As
8...SunlandMedical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow.
Comparative Balance Sheet
As of December 31
2020 2019
Assets
Current assets
Cash $390,000 $417,450
Accounts receivable, net 1,079,000 776,450
Inventory 729,000 681,100
Other current assets 381,400 247,100
Total current assets 2,579,400 2,122,100
Property, plant, & equipment, net 8,659,740 8,439,815
Total assets $11,239,140 $10,561,915
Liabilities and Stockholders' Equity
Current liabilities $3,178,000 $2,846,050
Long-term debt 3,702,700 3,892,600
Total liabilities 6,880,700 6,738,650
Preferred stock, $5 par value 58,900 58,900
Common stock, $0.25 par value 104,600 103,850
Retained earnings 4,194,940 3,660,515
Total stockholders' equity 4,358,440 3,823,265
Total liabilities and stockholders' equity $11,239,140 $10,561,915
Sunland Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year
2020 2019
Sales revenue (all on account) $10,177,200 $9,614,000
Cost of goods sold 5,611,950 5,298,800
Gross profit 4,565,250 4,315,200
Operating expenses 2,840,200 2,634,150
Net operating income 1,725,050 1,681,050
Interest expense 300,300 308,600
Net income before taxes 1,424,750 1,372,450
Income taxes (30%) 427,425 411,735
Net income $997,325 $960,715
Dividends paid
Preferred dividends 29,550 29,450
Common dividends 433,350 413,100
Total dividends paid 462,900 442,550
Net income retained 534,425 518,165
Retained earnings, beginning of year 3,660,515 3,142,350
Retained earnings, end of year $4,194,940 $3,660,515
A...Calculate the earnings per share (average of418,000shares outstanding for the year) for 2020.(Round answer to 2 decimal places, e.g. 2.55.)
B...Calculate the price/earnings ratio (market price of $48at year-end) for 2020.(Round answer to 1 decimal place, e.g. 2.5.)
C....Calculate the dividend payout ratio (dividends of $1.25per common share for the year) for 2020.(Round answer to 1 decimal place, e.g. 2.5.)
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College Accounting A Contemporary Approach
Authors: David Haddock, John Price, Michael Farina
5th Edition
126078035X, 978-1260780352
