• ABC Company is a manufacturing firm specializing in electronic gadgets. Analyze the following financial data for the year ending December 31, 20XX:

  During the year, the company purchased new machinery worth $500,000 and issued $200,000 worth of common stock to finance the acquisition. Additionally, the company acquired a patent for a new product, valued at $100,000. The company's balance sheet shows total assets of $2,000,000, with liabilities amounting to $800,000. Shareholders' equity stands at $1,200,000, comprising common stock of $600,000 and retained earnings of $600,000. The income statement indicates a net income of $300,000 for the year. Furthermore, the company paid out dividends of $100,000 during the year.

  Based on the provided information, prepare a comprehensive analysis addressing the following:

  • Determine the total liabilities and common stock issued during the year.
  • Calculate the book value of the patent acquired.
  • Assess the impact of the dividends on shareholders' equity.
  • Analyze the company's financial position and its ability to cover liabilities with assets.
  • Evaluate the company's profitability and assess the return on equity for the year.