Condensed financial data are presented below for the Phoenix Corporation: 20X2 20X1Accounts receivable$267,500 $230,000 Inventory 312,500 257,500 Total current assets 670,000 565,000 Intangible assets 50,000 60,000 Total assets 825,000 695,000 Current liabilities 252,500 200,000 Long-term liabilities 77,500 75,000 Sales 1,640,000 Cost of goods sold 982,500 Interest expense 10,000 Income tax expense 77,500 Net income 127,500 Cash flow from operations 71,000 Cash flow from investing activities (6,000) Cash flow from financing activities (62,500) Tax rate 30% If there is no preferred stock, the return on common equity for 20X2 is (rounded): Multiple Choice 25.8% 27.9% 41.4% 43.4%

Return on Common Stockholder's Equity -Return on Common Stockholder's Equity represents net income…

Answered: Condensed financial data are presented…

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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Condensed financial data are presented below for the Phoenix Corporation:

	20X2		20X1
Accounts receivable	$	267,500		$	230,000
Inventory		312,500			257,500
Total current assets		670,000			565,000
Intangible assets		50,000			60,000
Total assets		825,000			695,000
Current liabilities		252,500			200,000
Long-term liabilities		77,500			75,000
Sales		1,640,000
Cost of goods sold		982,500
Interest expense		10,000
Income tax expense		77,500
Net income		127,500
Cash flow from operations		71,000
Cash flow from investing activities		(6,000	)
Cash flow from financing activities		(62,500	)
Tax rate		30	%

If there is no preferred stock, the return on common equity for 20X2 is (rounded):

Multiple Choice

25.8%
27.9%
41.4%
43.4%

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