Hey, I'm having problems trying to find the solution for e and f. can you guys help! Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Mortgage note payable, 6%, issued 2005, due 2021 2,000,000 Total liabilities $3,000,000 Stockholders’ equity: Preferred $10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 $2,500,000 Preferred dividends $100,000 Common dividends 400,000 500,000 Balance, end of year 2,000,000 Total stockholders’ equity $5,000,000 Sales $18,900,000 Interest expense $120,000 Assuming that long-term investments totaled $3,000,000 throughout the year and that total asset was $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place. e. Rate earned on stockholders' equity % f. Rate earned on common stockholders' equity
Hey, I'm having problems trying to find the solution for e and f. can you guys help! Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Mortgage note payable, 6%, issued 2005, due 2021 2,000,000 Total liabilities $3,000,000 Stockholders’ equity: Preferred $10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 $2,500,000 Preferred dividends $100,000 Common dividends 400,000 500,000 Balance, end of year 2,000,000 Total stockholders’ equity $5,000,000 Sales $18,900,000 Interest expense $120,000 Assuming that long-term investments totaled $3,000,000 throughout the year and that total asset was $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place. e. Rate earned on stockholders' equity % f. Rate earned on common stockholders' equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Hey, I'm having problems trying to find the solution for e and f. can you guys help!
Six Measures of Solvency or Profitability
The following data were taken from the financial statements of Gates Inc. for the current fiscal year.
Property, plant, and equipment (net) | $3,200,000 | |||||
Liabilities: | ||||||
Current liabilities | $1,000,000 | |||||
Mortgage note payable, 6%, issued 2005, due 2021 | 2,000,000 | |||||
Total liabilities | $3,000,000 | |||||
Stockholders’ equity: | ||||||
$1,000,000 | ||||||
Common stock, $10 par (no change during year) | 2,000,000 | |||||
Retained earnings: | ||||||
Balance, beginning of year | $1,570,000 | |||||
Net income | 930,000 | $2,500,000 | ||||
Preferred dividends | $100,000 | |||||
Common dividends | 400,000 | 500,000 | ||||
Balance, end of year | 2,000,000 | |||||
Total stockholders’ equity | $5,000,000 | |||||
Sales | $18,900,000 | |||||
Interest expense | $120,000 |
Assuming that long-term investments totaled $3,000,000 throughout the year and that total asset was $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place.
e. Rate earned on |
% |
f. Rate earned on common stockholders' equity |
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