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Blossom Company has $ 1,000,000 in assets and $1,000,000 in stockholders' equity, with 35,000 shares outstanding the entire year. It has a return on assets of 10%. During 2016, it had net income of $ 100,000. On January 1, 2017, it issued $351,000 in debt at 4% and immediately repurchased 17,500 shares for $351,000. Management expected that, had it not issued the debt, it would have had net income of $ 100,000 in 2017. Determine the company's net income and earnings per share for 2016 and 2017. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.) Net income Earnings per share $ 2016 Compute the company's return on common stockholders' equity for 2016 and 2017. (Round answers to 0 decimal places, e.g. 15 %) Return on common stockholders' equity 2017 2016 % 2017 %

Blossom Company has $ 1,000,000 in assets and $1,000,000 in stockholders' equity, with 35,000 shares outstanding the entire year. It has a return on assets of 10%. During 2016, it had net income of $ 100,000. On January 1, 2017, it issued $351,000 in debt at 4% and immediately repurchased 17,500 shares for $351,000. Management expected that, had it not issued the debt, it would have had net income of $ 100,000 in 2017. Determine the company's net income and earnings per share for 2016 and 2017. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.) Net income Earnings per share $ 2016 Compute the company's return on common stockholders' equity for 2016 and 2017. (Round answers to 0 decimal places, e.g. 15 %) Return on common stockholders' equity 2017 2016 % 2017 %

FINANCIAL ACCOUNTING
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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Blossom Company has $ 1,000,000 in assets and $1,000,000 in stockholders' equity, with 35,000 shares outstanding the entire year. It has a return on assets of 10%. During 2016, it had net income of $ 100,000. On January 1, 2017, it issued $351,000 in debt at 4% and immediately repurchased 17,500 shares for $351,000. Management expected that, had it not issued the debt, it would have had net income of $ 100,000 in 2017. Determine the company's net income and earnings per share for 2016 and 2017. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.) Net income Earnings per share $ 2016 Compute the company's return on common stockholders' equity for 2016 and 2017. (Round answers to 0 decimal places, e.g. 15%) Return on common stockholders' equity 2017 2016 2017 %
Transcribed Image Text:Blossom Company has $ 1,000,000 in assets and $1,000,000 in stockholders' equity, with 35,000 shares outstanding the entire year. It has a return on assets of 10%. During 2016, it had net income of $ 100,000. On January 1, 2017, it issued $351,000 in debt at 4% and immediately repurchased 17,500 shares for $351,000. Management expected that, had it not issued the debt, it would have had net income of $ 100,000 in 2017. Determine the company's net income and earnings per share for 2016 and 2017. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.) Net income Earnings per share $ 2016 Compute the company's return on common stockholders' equity for 2016 and 2017. (Round answers to 0 decimal places, e.g. 15%) Return on common stockholders' equity 2017 2016 2017 %
Return on common stockholders' equity Debt to assets ratio Compute the company's debt to assets ratio for 2016 and 2017. (Round answers to 0 decimal places, e.g. 15%) 2016 % % 2017 %
Transcribed Image Text:Return on common stockholders' equity Debt to assets ratio Compute the company's debt to assets ratio for 2016 and 2017. (Round answers to 0 decimal places, e.g. 15%) 2016 % % 2017 %
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