The comparative financial statements of Marshall Inc are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2

12. Divide the sum of net income plus interest expense by average total assets. Average Total Assets = (Beginning Total Assets + Ending Total Assets)/2

Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 2011 2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00 550,000.00 3 Net income 600,000.00 4 Total $4,304,000.00 $3,814,000.00 5 Dividends: 6 On preferred stock $10,000.00 $10,000.00 100,000.00 7 On common stock 100,000.00 8 Total dividends $110,000.00 $110,000.00 9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00 Instructions 1 2092 2011 2 Sales $10,000,000.00 3 Cost of goods sold $10,850,000.00 6,000,000.00 4 Gross profit 5,450,000.00 $4,550,000.00 $4,850,000.00 5 Selling expenses 6 Administrative expenses $2,000,000.00 1,500,000.00 1 Total operating expenses * Income from operations $2,170,000.00 1,627,500.00 $3,797,500.00 $1,052,500.00 99,500.00 $3,500,000.00 9 Other revenue 10 $1,050,000.00 20,000.00 $1,070,000.00 120,000.00 550,000.00 $1,152,000.00 132,000.00 $1,020,000.00 420,000.00 $600,000.00 11 Other expense (interest) 12 Income before income tax 13 Income tax expense 400,000.00 14 Net income $550,000.00 Instructions Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 2 Assets 3 Current assets: 4 Cash $1,050,000.00 $950,000.00 5 Marketable securities 301,000.00 6 Accounts receivable (net) 585,000.00 420,000.00 500,000.00 380,000.00 7 Inventories 420,000.00 8 Prepaid expenses Total current assets 108,000.00 20,000.00 9 $2,464,000.00 $2,270,000.00 10 Long-term investments 11 Property, plant, and equipment (net) 800,000.00 $50,000.00 5,760,000.00 5,184,000.00 12 Total assets $9,024,000.00 $8,254,000.00 13 Liabilities 14 Current liabilities $880,000.00 $800,000.00 15 Long-term liabilities: 15 Mortgage note payable, 6%, $200,000.00 $0.00 17 Bonds payable, 4%, 3,000,000.00 3,000,000.00 18 Total long-term liabilities $3,200,000.00 $3,000,000.00 19 Total liabilities $4,080,000.00 $3,800,000.00 20 Stockholders' Equity $250,000.00 $250,000.00 21 Preferred 4% stock, $5 par 22 Common stock, $5 par 500,000.00 500,000.00 23 Retained earnings 4,194,000.00 3,794,000.00 24 Total stockholders' equity $4,944,000.00 $4,454,000.00 25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00