Multiple Choice

$226,000

$58,000

($226,000)

($58,000)

Assets Year 2 Year1 Current assets: Cash Accounts receivable, net Inventory Prepaid expenses $105,000 255,000 206,000 44,000 610,000 1,065,000 $1,675,000 $ 190,000 220,000 200,000 50,000 660,000 970,000 $1,630,000 Total current assets Plant and equipment, net Totalassets Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 119,000 88,000 53,000 260,000 110,000 370,000 $110,000 80,000 50,000 240,000 110,000 350,000 Accrued liabilities Notes payable, short term Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock, $5 par value Additional paid-in capital Retained earnings 250,000 70,000 985,000 1,305,000 $1,675,000 250,000 70,000 960,000 1,280,000 $1,630,000 Total stockholders' equity Total liabilities & stockholders' equity Income Statement For the Year Ended December 31, Year 2 Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $1,330,000 890,000 440,000 393,571 46,429 10,000 36,429 10,929 $ 25,500 Dividends on common stock during Year 2 totaled $500. The market price of common stock at the end of Year 2 was $8.06 per share The company's equity multiplier at the end of Year 2 is closest to