A-.Create the ratio of fixed assets to long-term liabilitiesB-. Create the ratio of liabilities to stockholders' equity Marshall Inc.Comparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y120Υ220Υ1Sales .....Cost of goods sold..Gross profit ...Selling expensesAdministrative expenses.$10,850,000 $10,000,0006,000,0005,450,000$ 4,850,000 $ 4,550,000$ 2,170,000 $ 2,000,0001,627,5001,500,000$ 3,797,500 $ 3,500,000$ 1,052,500 $ 1,050,00099,500$ 1,152,000 $ 1,070,000132,000$ 1,020,000 $ 950,000Total operating expensesIncome from operationsOther income..20,000Other expense (interest)Income before income tax120,000Income tax expense420,000400,000Net income$ 600,000 $ 550,000Marshall Inc.Comparative Balance SheetDecember 31, 20Y2 and 20Y120Y220Υ1AssetsCurrent assets:Cash ....$1,050,000$ 950,000Marketable securities...301,000420,000Accounts receivable (net).Inventories .Prepaid expensesTotal current assets585,000500,000420,000380,000108,000$ 2,464,00020,000$2,270,000Long-term investments.Property, plant, and equipment (net)800,000800,0005,760,000$ 9,024,0005,184,000$8,254,000Total assets .LiabilitiesCurrent liabilities..$ 880,000$ 800,000Long-term liabilities:Mortgage note payable, 6%, .Bonds payable, 4%,Total long-term liabilitiesTotal liabilities .$ 200,000$3,000,000$ 3,200,000$ 4,080,0003,000,000$3,000,000$3,800,000Stockholders' Equity$ 250,000$ 250,000Preferred 4% stock, $5 parCommon stock, $5 par..Retained earnings...Total stockholders' equity .Total liabilities and stockholders' equity......500,0004,194,000$ 4,944,000$ 9,024,000500,0003,704,000$4,454,000$8,254,000

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A-.Create the ratio of fixed assets to long-term liabilities B-. Create the ratio of liabilities to stockholders' equity

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A-.Create the ratio of fixed assets to long-term liabilities

B-. Create the ratio of liabilities to stockholders' equity

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Υ2
20Υ1
Sales .....
Cost of goods sold..
Gross profit ...
Selling expenses
Administrative expenses.
$10,850,000 $10,000,000
6,000,000
5,450,000
$ 4,850,000 $ 4,550,000
$ 2,170,000 $ 2,000,000
1,627,500
1,500,000
$ 3,797,500 $ 3,500,000
$ 1,052,500 $ 1,050,000
99,500
$ 1,152,000 $ 1,070,000
132,000
$ 1,020,000 $ 950,000
Total operating expenses
Income from operations
Other income..
20,000
Other expense (interest)
Income before income tax
120,000
Income tax expense
420,000
400,000
Net income
$ 600,000 $ 550,000
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y2
20Υ1
Assets
Current assets:
Cash ....
$1,050,000
$ 950,000
Marketable securities...
301,000
420,000
Accounts receivable (net).
Inventories .
Prepaid expenses
Total current assets
585,000
500,000
420,000
380,000
108,000
$ 2,464,000
20,000
$2,270,000
Long-term investments.
Property, plant, and equipment (net)
800,000
800,000
5,760,000
$ 9,024,000
5,184,000
$8,254,000
Total assets .
Liabilities
Current liabilities..
$ 880,000
$ 800,000
Long-term liabilities:
Mortgage note payable, 6%, .
Bonds payable, 4%,
Total long-term liabilities
Total liabilities .
$ 200,000
$
3,000,000
$ 3,200,000
$ 4,080,000
3,000,000
$3,000,000
$3,800,000
Stockholders' Equity
$ 250,000
$ 250,000
Preferred 4% stock, $5 par
Common stock, $5 par..
Retained earnings...
Total stockholders' equity .
Total liabilities and stockholders' equity..
....
500,000
4,194,000
$ 4,944,000
$ 9,024,000
500,000
3,704,000
$4,454,000
$8,254,000

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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