PNG Company Comparative Balance Sheets

Use the following comparative balance sheets, income statement, and additional information to answer questions $(1)$ through $(5).$

PNG Company

Comparative Balance Sheets

For the year ended December $31$

$20$X$1$

$20$X$0$

Current assets

Cash

$$157,000$

$$105,000$

Accounts receivable

$49,000$

$62,000$

Inventory

$53,700$

$36,100$

Prepaid rent

$11,400$

$8,300$

Total current assets

$$271,100$

$$211,400$

Long$-$term assets

Investment in bonds

$$30,000$

$$14,800$

Land

$216,300$

$184,200$

Equipment $($net$)$

$114,500$

$137,900$

Total long$-$term assets

$$360,800$

$$336,900$

Total assets

$$631,900$

$$548,300$

Current liabilities

Accounts payable

$$61,300$

$$52,700$

Interest payable

$4,900$

$8,500$

Income tax payable

$15,400$

$12,600$

Total current liabilities

$$81,600$

$$73,800$

Long$-$term liabilities

Bonds payable

$$173,800$

$$205,400$

Stockholders' equity

Common stock

$$183,500$

$$165,200$

Retained earnings

$193,000$

$103,900$

Total liabilities and equity

$$631,900$

$$548,300$

PNG Company

Income Statement

For the year ended December $31,20$X$1$

Revenues

Sales revenue

$$2,380,000$

Cost of goods sold

$1,240,000$

Gross profit

$$1,140,000$

Expenses

Operating expenses

$$899,600$

Depreciation expense

$23,400$

Interest expense

$19,000$

Income tax expense

$61,000$

Total expenses

$$1,003,000$

Net income

$$137,000$

Additional Information for PNG Co$.$ in $20$X$1$:

$1.$ All sales were on account.

$2.$ Earnings per share were $$2\mathrm{.}00.$

$3.$ The closing stock price on $12/31/$X$1$ was $$15\mathrm{.}40.$

$4.$ PNG had $68,500$ of its only class of $($common$)$ stock outstanding on $12/31/$X$1.$

What was PNG Company's debt to equity ratio for the year $20$X$1?$

$0\mathrm{.}22$

$0\mathrm{.}46$

$1\mathrm{.}39$

$0\mathrm{.}68$

What was PNG Company's return on equity for the year $20$X$1?$

$36\mathrm{.}39\%$

$74\mathrm{.}66\%$

$42\mathrm{.}44\%$

$274\mathrm{.}82\%$