Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 54 on December 31, 20Y2. Marshall

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 54 on December 31, 20Y2.

Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1
Retained earnings, January 1 $ 883,050 $ 755,950
Net income 201,600 154,800
Total $1,084,650 $ 910,750
Dividends:
On preferred stock $ 7,000 $ 7,000
On common stock 20,700 20,700
Total dividends $ 27,700 $ 27,700
Retained earnings, December 31 $ 1,056,950 $ 883,050

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1
Sales $ 1,300,860 $ 1,198,570
Cost of goods sold 503,700 463,400
Gross profit $ 797,160 $ 735,170
Selling expenses $ 263,690 $ 327,660
Administrative expenses 224,630 192,440
Total operating expenses $488,320 $520,100
Income from operations $ 308,840 $ 215,070
Other revenue 16,260 13,730
$ 325,100 $ 228,800
Other expense (interest) 96,000 52,800
Income before income tax $ 229,100 $ 176,000
Income tax expense 27,500 21,200
Net income $ 201,600 $ 154,800

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y2 20Y1
Assets
Current assets
Cash $ 353,740 $ 195,510
Marketable securities 535,400 324,000
Accounts receivable (net) 248,200 233,600
Inventories 189,800 146,000
Prepaid expenses 66,924 39,100
Total current assets $ 1,394,064 $ 938,210
Long-term investments 288,531 54,104
Property, plant, and equipment (net) 1,440,000 1,296,000
Total assets $ 3,122,595 $ 2,288,314
Liabilities
Current liabilities $ 435,645 $ 315,264
Long-term liabilities:
Mortgage note payable, 8% $ 540,000 $ 0
Bonds payable, 8% 660,000 660,000
Total long-term liabilities $ 1,200,000 $ 660,000
Total liabilities $ 1,635,645 $ 975,264
Stockholders' Equity
Preferred $0.70 stock, $20 par $ 200,000 $ 200,000
Common stock, $10 par 230,000 230,000
Retained earnings 1,056,950 883,050
Total stockholders' equity $ 1,486,950 $ 1,313,050
Total liabilities and stockholders' equity $ 3,122,595 $ 2,288,314

Required:

Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.

Inventory turnover
Number of days' sales in inventory days
Ratio of fixed assets to long-term liabilities
Ratio of liabilities to stockholders' equity
Times interest earned
Asset turnover
Return on total assets %
Return on stockholders equity %
Return on common stockholders equity %
Earnings per share on common stock $
Price-earnings ratio
Dividends per share of common stock $
Dividend yield %

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_2

Step: 3

blur-text-image_3

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

Financial Accounting

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

3rd Edition

0471372668, 978-0471372660

More Books

Students also viewed these Accounting questions

Question

what is the primary goal of leadership according to the LMX theory

Answered: 1 week ago