2018 2017 Income Statement-partial: $ 18,900 $ 24,000 Net Income Dec. 31, 2018 Dec. 31, 2017 Balance Sheet-partial: $ 285,000 $ 200,000 Total Assets Paid-In Capital: $ 90,000 Preferred Stock-11%, $9 Par Value; 60,000 shares authorized, 10,000 shares issued and outstanding Common Stock-$1 Par Value; 45,000 shares authorized, 30,000 shares issued and outstanding $ 90,000 30,000 30,000 Paid-In Capital in Excess of Par-Common 14,000 14,000 Retained Earnings 51,000 42,000 Total Stockholders' Equity $ 185,000 $ 176,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Computing earnings per share, price/earnings ratio, and rate of return on common stockholders’ equity

Gullo Company reported these figures for 2018 and 2017:

Requirements

  1. Compute Gullo Company’s earnings per share for 2018. Assume the company paid the minimum preferred dividend during 2018. Round to the nearest cent.
  2. Compute Gullo Company’s price/earnings ratio for 2018. Assume the company’s market price per share of common stock is $9. Round to two decimals.
  3. Compute Gullo Company’s rate of return on common stockholders’ equity for 2018. Assume the company paid the minimum preferred dividend during 2018. Round to the nearest whole percent.
2018
2017
Income Statement-partial:
$ 18,900
$ 24,000
Net Income
Dec. 31, 2018 Dec. 31, 2017
Balance Sheet-partial:
$ 285,000
$ 200,000
Total Assets
Paid-In Capital:
$ 90,000
Preferred Stock-11%, $9 Par Value; 60,000 shares
authorized, 10,000 shares issued and outstanding
Common Stock-$1 Par Value; 45,000 shares
authorized, 30,000 shares issued and outstanding
$ 90,000
30,000
30,000
Paid-In Capital in Excess of Par-Common
14,000
14,000
Retained Earnings
51,000
42,000
Total Stockholders' Equity
$ 185,000
$ 176,000
Transcribed Image Text:2018 2017 Income Statement-partial: $ 18,900 $ 24,000 Net Income Dec. 31, 2018 Dec. 31, 2017 Balance Sheet-partial: $ 285,000 $ 200,000 Total Assets Paid-In Capital: $ 90,000 Preferred Stock-11%, $9 Par Value; 60,000 shares authorized, 10,000 shares issued and outstanding Common Stock-$1 Par Value; 45,000 shares authorized, 30,000 shares issued and outstanding $ 90,000 30,000 30,000 Paid-In Capital in Excess of Par-Common 14,000 14,000 Retained Earnings 51,000 42,000 Total Stockholders' Equity $ 185,000 $ 176,000
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