Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2019, financial statements:

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2019, financial statements:
 

 
For the Year Ended December 31, 2019:      
Net revenues $ 30,200  
Cost of services provided   11,300  
Depreciation expense   6,000  
Operating income $ 12,900  
Interest expense   3,200  
Income tax expense   3,500  
Net income $ 6,200  
At December 31, 2019:      
Assets      
Cash and short-term investments $ 3,200  
Accounts receivable, net   9,500  
Property, plant, and equipment, net   83,400  
Total assets $ 96,100  
Liabilities and Stockholders' Equity      
Accounts payable $ 1,600  
Income taxes payable   1,700  
Notes payable (long term)   49,400  
Paid-in capital   14,000  
Retained earnings   29,400  
Total liabilities and stockholders' equity $ 96,100  
 

 

At December 31, 2018, total assets were $82,000 and total stockholders' equity was $37,900. There were no changes in notes payable or paid-in capital during 2019.

Required:

  1. From the above income statement and balance sheet for Gerrard Construction Co. What other financial statements are required?
  2. Indicate the note disclosures that should be provided by Gerrard Construction Co.
  3. Assume that the balance of "Accounts Receivable, net" at December 31, 2018, was $8,800. Calculate the following activity measures for Gerrard Construction Co. for the year ended December 31, 2019:
    1. Accounts receivable turnover.
    2. Number of days' sales in accounts receivable.
  4. Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2019:
    1. Debt ratio.
    2. Debt/equity ratio.
  5. Gerrard Construction Co. wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of 4.1 million have on the company's debt ratio and debt/equity ratio?
  6. (1) Calculate the amount of dividends declared and paid during the year ended December 31, 2019.
    (2) Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par value common stock outstanding throughout 2019, and that the market price per share of common stock at December 31, 2019, was $18.78. Calculate the following profitability measures for the year ended December 31, 2019:
    1. Earnings per share of common stock.
    2. Price/earnings ratio.
    3. Dividend yield.
    4. Dividend payout ratio.

Please do F2. The answer to F1 is $700

Print
Required A
Required B
Required C
Required D
Required E
Required F1
Required F2
eferences
Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par
value common stock outstanding throughout 2019, and that the market price per share of common stock at December 31,
2019, was $18.78. Calculate the following profitability measures for the year ended December 31, 2019: (Round your
answers to 1 decimal place. Round "Earnings per share" answer to 2 decimal places.)
1. Earnings per share of common stock.
2. Price/earnings ratio.
3. Dividend yield.
4. Dividend payout ratio.
Show less A
1. Earnings per share of common stock
2. Price/earnings ratio
times
3. Dividend yield
%
4. Dividend payout ratio
< Required F1
Required F2 >
< Prev
6 of 6
Next >
aw
Transcribed Image Text:Print Required A Required B Required C Required D Required E Required F1 Required F2 eferences Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par value common stock outstanding throughout 2019, and that the market price per share of common stock at December 31, 2019, was $18.78. Calculate the following profitability measures for the year ended December 31, 2019: (Round your answers to 1 decimal place. Round "Earnings per share" answer to 2 decimal places.) 1. Earnings per share of common stock. 2. Price/earnings ratio. 3. Dividend yield. 4. Dividend payout ratio. Show less A 1. Earnings per share of common stock 2. Price/earnings ratio times 3. Dividend yield % 4. Dividend payout ratio < Required F1 Required F2 > < Prev 6 of 6 Next > aw
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