Modern Building Supply sells various building materials to retail outlets. The company has just approached Linden Bank requesting a $300,000 loan to strengthen the cash account and to pay certain pressing short-term obligations. The company's financial statements for the most recent two years are shown below. MODERN BUILDING SUPPLY Comparative Balance Sheet This Year Last Year Assets Current assets: cash $ 90, 900 $ 200, 606 Temporary investments 50, 006 Accounts receivable, net 650, 090 400, 060 Inventory 1, 300, 090 300, 080 Prepaid expenses 20, 000 20, 000 Total current assets 2, 860, 000 1, 470, 060 Plant and equipment, net 1, 940, 906 1, 830, 060 Total assets $ 4, 080, 900 $ 3, 300, 060 Liabilities and Shareholders' Equity Liabilities: Current liabilities $ 1, 100, 000 $ 600, 006 Bonds payable, 12% 750, 900 750, 600 Total liabilities 1, 850, 900 1, 350, 000 Shareholders' equity: Preferred shares, 4,080, $4 no par 280, 900 200, 000 Common shares, 50, 080 580, 090 500, 006 Retained earnings 1, 450, 090 1, 250, 060 Total shareholders' equity 2, 150, 090 1, 950, 060 Total liabilities and shareholders' equity $ 4,080, 090 $ 3,300, 060 MODERN BUILDING SUPPLY Comparative Income Statement and Reconciliation of Retained Earnings This Year Last Year Sales $7, 600,080 $6, 600,080 Cost of goods sold 5, 400, 080 4, 800,080 Gross margin 1, 660, 080 1, 260,080 Selling and administrative expenses 970, 080 710,080 Operating income 630, 080 490,680 Interest expense 90, 080 90,080 Net income before taxes 540, 080 406, 080 Income taxes (40%) 216, 608 160, 808 Net income 324,008 240, 080 Dividends paid: Preferred dividends 16,080 16,080 Common dividends 108, 080 Total dividends paid 124,080 76,080 Net income retained 200, 080 164, 080 Retained earnings, beginning of year 1, 250,080 1, 086,080 Retained earnings, end of year $1, 450, 080 $1, 250, 080b. Compute the return on common shareholders' equity for both this year and last year. (Shareholders' equity at the beginning of last year was $1,786,000.) (Round your answers to 1 decimal place.) X Answer is not complete. This Year Last Year Return on common shareholders' equity 6.0 X % %c. Average sale perlod. (The Inventory at the beginning of last year totalled $720,000.) (Round your Intermedlate calculations and final answer to 1 decimal place. Use 365 days In a year.) * Answer is complete but not entirely correct. This year Last year Average sale period 71.0 X days 57.8 X days