Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 2012. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 20Y1 Retained earnings, January 1 20Y2 $3,704,000 20Y1 $3,264,000 $600,000 $550,000 Net income Dividends: On preferred stock On common stock Increase in retained earnings Retained earnings, December 31 (10,000) (10,000) (100,000) (100,000) $490,000 $440,000 $4,194,000 $3,704,000 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Operating income Other revenue and expense: Other revenue Other expense (interest) Income before income tax expense Income tax expense Net income 20Y2 $ 10,850,000 (6,000,000) $ 4,850,000 $ (2,170,000) (1,627,500) $(3,797,500) $ 1,052,500 99,500 (132,000) $ 1,020,000 (420,000) $ 600,000 20Y1 $10,000,000 (5,450,000) $4,550,000 $ (2,000,000) (1,500,000) $ (3,500,000) $1,050,000 20,000 (120,000) $ 950,000 (400,000) $ 550,000