Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 64 on December 31, 20Y2. Marshall

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 64 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 $ 4,159,100 $ 3,518,300
Net income 921,600 720,600
Total $5,080,700 $ 4,238,900
Dividends:
On preferred stock $ 11,900 $ 11,900
On common stock 67,900 67,900
Total dividends $ 79,800 $ 79,800
Retained earnings, December 31 $ 5,000,900 $ 4,159,100

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2 20Y1
Sales $ 5,450,910 $ 5,022,190
Cost of goods sold 1,949,100 1,793,170
Gross profit $ 3,501,810 $ 3,229,020
Selling expenses $ 1,185,450 $ 1,442,200
Administrative expenses 1,009,830 847,010
Total operating expenses $2,195,280 $2,289,210
Income from operations $ 1,306,530 $ 939,810
Other revenue 68,770 59,990
$ 1,375,300 $ 999,800
Other expense (interest) 328,000 180,800
Income before income tax $ 1,047,300 $ 819,000
Income tax expense 125,700 98,400
Net income $ 921,600 $ 720,600

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y2 20Y1
Assets
Current assets
Cash $ 921,420 $ 974,710
Marketable securities 1,394,590 1,615,230
Accounts receivable (net) 985,500 927,100
Inventories 730,000 569,400
Prepaid expenses 174,322 194,940
Total current assets $ 4,205,832 $ 4,281,380
Long-term investments 3,151,788 1,733,000
Property, plant, and equipment (net) 4,920,000 4,428,000
Total assets $ 12,277,620 $ 10,442,380
Liabilities
Current liabilities $ 1,356,720 $ 2,203,280
Long-term liabilities:
Mortgage note payable, 8% $ 1,840,000 $ 0
Bonds payable, 8% 2,260,000 2,260,000
Total long-term liabilities $ 4,100,000 $ 2,260,000
Total liabilities $ 5,456,720 $ 4,463,280
Stockholders' Equity
Preferred $0.70 stock, $50 par $ 850,000 $ 850,000
Common stock, $10 par 970,000 970,000
Retained earnings 5,000,900 4,159,100
Total stockholders' equity $ 6,820,900 $ 5,979,100
Total liabilities and stockholders' equity $ 12,277,620 $ 10,442,380

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.

1. Working capital $
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables days
6. Inventory turnover
7. Number of days' sales in inventory days
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets %
13. Return on stockholders equity %
14. Return on common stockholders equity %
15. Earnings per share on common stock $
16. Price-earnings ratio
17. Dividends per share of common stock $
18. Dividend yield %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions