Cash Marketable securities Accounts receivable (net) Inventories Prepaid expenses Total current assets ong-term investments roperty, plant, and equipment (net) Total assets Liabilities Current liabilities Long-term liabilities: Mortgage note payable, 6% Bonds payable, 4% Total long-term liabilities Total liabilities Stockholders' Equity Preferred 4% stock, $5 par Common stock, $5 par Retained earnings $1,050,000 $950,000 301,000 420,000 585,000 500,000 420,000 380,000 108,000 20,000 $2,464,000 $2,270,000 800,000 800,000 5,760,000 5,184,000 $9,024,000 $8,254,000 $ 880,000 $200,000 3,000,000 $ 800,000 $0 3,000,000 $3,200,000 $3,000,000 $4,080,000 $3,800,000 $250,000 $250,000 500,000 500,000 4,194,000 3,704,000 $4,944,000 $4,454,000 $9,024,000 $8,254,000 Total stockholders' equity Total liabilities and stockholders' equity Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent. 1. Working Capital 2. Current ratio 3. Quick ratio
Cash Marketable securities Accounts receivable (net) Inventories Prepaid expenses Total current assets ong-term investments roperty, plant, and equipment (net) Total assets Liabilities Current liabilities Long-term liabilities: Mortgage note payable, 6% Bonds payable, 4% Total long-term liabilities Total liabilities Stockholders' Equity Preferred 4% stock, $5 par Common stock, $5 par Retained earnings $1,050,000 $950,000 301,000 420,000 585,000 500,000 420,000 380,000 108,000 20,000 $2,464,000 $2,270,000 800,000 800,000 5,760,000 5,184,000 $9,024,000 $8,254,000 $ 880,000 $200,000 3,000,000 $ 800,000 $0 3,000,000 $3,200,000 $3,000,000 $4,080,000 $3,800,000 $250,000 $250,000 500,000 500,000 4,194,000 3,704,000 $4,944,000 $4,454,000 $9,024,000 $8,254,000 Total stockholders' equity Total liabilities and stockholders' equity Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent. 1. Working Capital 2. Current ratio 3. Quick ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Chap 14 Q.4
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Measures of liquidity, solvency, and profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
$3,704,000
$600,000
Retained earnings, January 1
Net income
Dividends:
On preferred stock
On common stock
Increase in retained earnings
Retained earnings, December 31
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Operating income
Other revenue and expense:
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
20Y1
$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
Other revenue
Other expense (interest)
Income before income tax expense
Income tax expense
Net income
Current assets:
Cash
Marshall Inc.
Assets
Marketable securities
Accounts receivable (net)
Inventories
(10,000)
(10,000)
(100,000) (100,000)
$490,000
$440,000
$4,194,000
$3,704,000
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y1
$3,264,000
$550,000
Prepaid expenses
Total current assets
Long-term investments
Property, plant, and equipment (net)
99,500
(132,000)
$1,020,000
(420,000)
$600,000
2012
20,000
(120,000)
$950,000
(400,000)
$550,000
10.034.000
20Y1
$1,050,000
301,000
585,000
420,000
108,000
$2,464,000 $2,270,000
800,000
800,000
5,760,000
5,184,000
$950,000
420,000
500,000
380,000
20,000
+0.254.000
K"
Transcribed Image Text:eBook
Measures of liquidity, solvency, and profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
$3,704,000
$600,000
Retained earnings, January 1
Net income
Dividends:
On preferred stock
On common stock
Increase in retained earnings
Retained earnings, December 31
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Operating income
Other revenue and expense:
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
20Y1
$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
Other revenue
Other expense (interest)
Income before income tax expense
Income tax expense
Net income
Current assets:
Cash
Marshall Inc.
Assets
Marketable securities
Accounts receivable (net)
Inventories
(10,000)
(10,000)
(100,000) (100,000)
$490,000
$440,000
$4,194,000
$3,704,000
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y1
$3,264,000
$550,000
Prepaid expenses
Total current assets
Long-term investments
Property, plant, and equipment (net)
99,500
(132,000)
$1,020,000
(420,000)
$600,000
2012
20,000
(120,000)
$950,000
(400,000)
$550,000
10.034.000
20Y1
$1,050,000
301,000
585,000
420,000
108,000
$2,464,000 $2,270,000
800,000
800,000
5,760,000
5,184,000
$950,000
420,000
500,000
380,000
20,000
+0.254.000
K
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Current assets:
Cash
Marketable securities
Accounts receivable (net)
Inventories
Prepaid expenses
Assets
Total current assets
Long-term investments
Property, plant, and equipment (net)
Total assets
Liabilities
Current liabilities
Long-term liabilities:
Mortgage note payable, 6%
Bonds payable, 4%
Total liabilities
Total long-term liabilities
Stockholders' Equity
Preferred 4% stock, $5 par
Common stock, $5 par
Retained earnings
$1,050,000 $950,000
420,000
500,000
380,000
20,000
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Days' sales in receivables
6. Inventory turnover
7. Days' sales in inventory
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
301,000
585,000
420,000
108,000
$2,464,000 $2,270,000
800,000
800,000
5,760,000
5,184,000
$9,024,000
$8,254,000
$ 880,000
$200,000
$0
3,000,000
3,000,000
$3,200,000 $3,000,000
$4,080,000 $3,800,000
$250,000 $250,000
500,000
500,000
4,194,000 3,704,000
$4,944,000 $4,454,000
$9,024,000. $8,254,000
$ 800,000
Total stockholders' equity
Total liabilities and stockholders' equity.
Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.
days
days
%
%
%
%
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Transcribed Image Text:eBook
Current assets:
Cash
Marketable securities
Accounts receivable (net)
Inventories
Prepaid expenses
Assets
Total current assets
Long-term investments
Property, plant, and equipment (net)
Total assets
Liabilities
Current liabilities
Long-term liabilities:
Mortgage note payable, 6%
Bonds payable, 4%
Total liabilities
Total long-term liabilities
Stockholders' Equity
Preferred 4% stock, $5 par
Common stock, $5 par
Retained earnings
$1,050,000 $950,000
420,000
500,000
380,000
20,000
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Days' sales in receivables
6. Inventory turnover
7. Days' sales in inventory
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
301,000
585,000
420,000
108,000
$2,464,000 $2,270,000
800,000
800,000
5,760,000
5,184,000
$9,024,000
$8,254,000
$ 880,000
$200,000
$0
3,000,000
3,000,000
$3,200,000 $3,000,000
$4,080,000 $3,800,000
$250,000 $250,000
500,000
500,000
4,194,000 3,704,000
$4,944,000 $4,454,000
$9,024,000. $8,254,000
$ 800,000
Total stockholders' equity
Total liabilities and stockholders' equity.
Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.
days
days
%
%
%
%
Home
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