Five Measures of Solvency or ProfitabilityThe balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:Bonds payable, 10%$1,900,000Preferred $10 stock, $50 par97,000Common stock, $11 par1,760,550.00Income before income tax was $399,000, and income taxes were $59,500 for the current year. Cash dividends paid on common stock during the current year totaled $51,216. Thecommon stock was selling for $16 per share at the end of the year.Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers forsubsequent requirements, if requireda. Times interest earned ratiotimesb. Earnings per share on common stockc. Price-earnings ratiod. Dividends per share of common stocke. Dividend yield%

a. Compute the times interest earned ratio:

Answered: Five Measures of Solvency or…

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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Los Altos, Inc., disclosed the following information in a recent annual report: Year 1 Year 2 Net income $35,000 $55,000 Preferred stock dividends 3,000 3,000 Average common stockholders' equity 1,200,000 1,500,000 Dividend per common share 1.20 1.20 Earnings per share 1.90 2.05 Market price per common share, year-end 19.50 21.00 Calculate the common stock dividend yield for Los Altos, Inc. for both years. Round to one decimal. Year 1 Year 2 Common stock dividend yield 6.15 % X 5.71 % X Did the dividend yield improve from Year 1 to Year 2? No +
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The following information was taken from the financial statements of Zeil Inc. for December 31 of the current fiscal year: Common stock, $15 par value (no change during the year) $2,700,000 Preferred $4 stock, $100 par (no change during the year) 2,000,000 The net income was $656,000 and the declared dividends on the common stock were $45,000 for the current year. The market price of the common stock is $24.00 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places. a. Earnings per Share $fill in the blank 1 b. Price-Earnings Ratio fill in the blank 2 c. Dividends per Share $fill in the blank 3 d. Dividend Yield fill in the blank 4
The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $1,212,000 Liabilities: Current liabilities $120,000 Note payable, 6%, due in 15 years 606,000 Total liabilities $726,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $544,500 Common stock, $10 par (no change during year) 544,500 Retained earnings: Balance, beginning of year $580,000 Net income 226,000 $806,000 Preferred dividends $21,780 Common dividends 58,220 80,000 Balance, end of year 726,000 Total stockholders' equity $1,815,000 Sales $16,351,500 Interest expense $36,360 Assuming that total assets were $2,414,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal…
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: CurrentYear PreviousYear Accounts payable $698,000 $212,000 Current maturities of serial bonds payable 460,000 460,000 Serial bonds payable, 10% 1,920,000 2,380,000 Common stock, $1 par value 100,000 130,000 Paid-in capital in excess of par 1,130,000 1,130,000 Retained earnings 3,900,000 3,100,000 The income before income tax expense was $714,000 and $624,800 for the current and previous years, respectively. a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place. Current year fill in the blank 1 Previous year fill in the blank 2 b. Determine the times interest earned ratio for both years. Round to one decimal place. Current year fill in the blank 3 Previous year fill in the blank 4
The following information has been derived from the accounts of Montgomery plc for the year ended 31 December 2005. On 31 December 2005 Current ratio 1.4:1 Quick ratio 0.9:1 Net current assets £32,000 Ordinary share capital in issue £150,000 Fixed assets as a percentage of shareholders’ funds 90% Debtors collection period 6 weeks For the year ended 31 December 2005 Net profit retained for the year as a percentage of ordinary share capital in issue 40% Annual rate of stock turnover 8.775 times Gross profit as a percentage of sales 25 On 31 December 2005 there were no current assets other than stock, debtors and bank balances and no liabilities other than ordinary shareholders’ funds and current liabilities. Assume a 52 week year.Calculate the amount of Montgomery plc current liabilities on 31 December 2005. A £22,857 B £28,800 C £44,800 D £80,000
[The following information applies to the questions displayed below.] Markus Company’s common stock sold for $5.25 per share at the end of this year. The company paid a common stock dividend of $0.63 per share this year. It also provided the following data excerpts from this year’s financial statements: EndingBalance BeginningBalance Cash $ 49,000 $ 44,200 Accounts receivable $ 92,000 $ 68,700 Inventory $ 76,300 $ 92,000 Current assets $ 217,300 $ 204,900 Total assets $ 801,000 $ 875,400 Current liabilities $ 85,500 $ 90,000 Total liabilities $ 206,000 $ 185,400 Common stock, $1 par value $ 165,000 $ 165,000 Total stockholders’ equity $ 595,000 $ 690,000 Total liabilities and stockholders’ equity $ 801,000 $ 875,400 This Year Sales (all on account) $ 1,095,000 Cost of goods sold $ 635,100 Gross margin $ 459,900 Net operating income $ 313,875 Interest expense $ 15,500 Net income $ 208,862 9. What is the…
Ratio the liabilities to stockholders equity and times interest earned. following data were taken from the financial statement of Hunter Inc.for December 31st of two recent years: Current year accounts payable $434,000. Current maturity. 290,000 Serial bonds payable, 10% 1,190,000 Common stock,$1 par value 70,000 Paid- in capital in excess of par 700,000 Retained earnings 2,420,000 Previous year $127,000 290,000 1,480,000 90,000 700,000 1,920,000 The income before income tax expense was $518,000 and $453,000 for the camera in previous years respectively. A. Determine the ratio of liabilities to stockholders Equity at the end of each year. Round to one decimal place. Current year Previous year B. Determine the times interest earned ratio for both years. Round to one decimal place. Current year Previous year C. The ratio of liabilities to stockholders Equity has _______and the number of times bond interest charges were earned has_______ from…
Balance sheet and income statement data indicate the following: Bonds payable, 10% (due in two years) $937,000 Preferred 5% stock, $100 par (no change during year) 243,000 Common stock, $50 par (no change during year) 1,770,000 Income before income tax for year 359,000 Income tax for year 70,000 Common dividends paid 88,500 Preferred dividends paid 12,150 Based on the data presented, what is the times interest earned ratio (rounded to one decimal place)?
Jay Co. reported the following financial data for its most current year: Beginning-of-year common stock $105,000 Beginning-of-year retained earning 175,400 Net Income 33,400 Dividends Paid 10,500 Issuance of common stock 24,000 Compute Jay’s end-of-year total stockholders’ equity.Total Stockholders' Equity= $?
Five Measures of Solvency or Profitability The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following: Bonds payable, 8% $2,000,000 Preferred $5 stock, $50 par $305,000 Common stock, $12 par $226,920.00 Income before income tax was $592,000, and income taxes were $88,750 for the current year. Cash dividends paid on common stock during the current year totaled $141,825. The common stock was selling for $300 per share at the end of the year. Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required. a. Times interest earned ratio fill in the blank 1 times b. Earnings per share on common stock $fill in the blank 2 c. Price-earnings ratio fill in the blank 3 d. Dividends per share of common stock $fill in the blank 4 e. Dividend yield fill in the blank 5 %
The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. InstructionsDetermine 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 capital2. Current ratio3. Quick ratio4. Accounts receivable turnover5. Number of days' sales in receivables6. Inventor)’ turnover7. Number of days' sales in inventory

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