Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 13-03A (Essay) Condensed balance sheet and income statement data for Jergan Corporation are presented here. JERGAN CORPORATION Balance Sheets December 31 2022 2021 2020

Problem 13-03A (Essay)

Condensed balance sheet and income statement data for Jergan Corporation are presented here.

JERGAN CORPORATION Balance Sheets December 31

2022

2021

2020

Cash

$ 30,000

$ 20,000

$ 18,000

Accounts receivable (net)

50,000

45,000

48,000

Other current assets

90,000

95,000

64,000

Investments

55,000

70,000

45,000

Plant and equipment (net)

500,000

370,000

358,000

$725,000

$600,000

$533,000

Current liabilities

$ 85,000

$ 80,000

$ 70,000

Long-term debt

145,000

85,000

50,000

Common stock, $10 par

320,000

310,000

300,000

Retained earnings

175,000

125,000

113,000

$725,000

$600,000

$533,000

JERGAN CORPORATION Income Statements For the Years Ended December 31

2022

2021

Sales revenue

$740,000

$600,000

Less: Sales returns and allowances

40,000

30,000

Net sales

700,000

570,000

Cost of goods sold

425,000

350,000

Gross profit

275,000

220,000

Operating expenses (including income taxes)

180,000

150,000

Net income

$ 95,000

$ 70,000

Additional information:
1. The market price of Jergans common stock was $7.00, $7.50, and $8.50 for 2020, 2021, and 2022, respectively.
2. You must compute dividends paid. All dividends were paid in cash.
Discuss briefly the improvement or lack thereof in the financial position and operating results from 2021 to 2022 of Jergan Corporation using the following ratios, profit margin, gross profit rate, asset turnover, earnings per share, price-earnings ratio, payout ratio and debt to assets ratio.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Sector Accounting

Authors: Rowan Jones, Maurice Pendlebury

6th Edition

0273720368, 9780273720362

More Books

Students also viewed these Accounting questions

Question

Explain how you would reduce stress at work.

Answered: 1 week ago