Mann Corporation decided to issue common stock and used the $120,000 proceeds to retire all of its outstanding bonds on January 1,2020. The following information is available for the company for 2019 and 2020.Net incomeAverage stockholder's equityTotal assetsCurrent liabilitiesTotal liabilitiesReturn on common stockholders' equityВ / у T, T I.Show Transcribed TextDebt to assets ratio202030%$120,00040%100,0001,000,0001,200,000 1,200,000360,000Given below is the debt to assets ratio for both the years.2020201912.5%2019Explain how it is possible that net income increased, but the return on common stockholders' equity decreased.$100,000800,000100,000480,00012.0%JE H 3CEEEMT 1Comment on the implications that the change in the debt to assets ratio would have on the company's solvency.

The company computes ratio to evaluate the performance of the entity. For example solvency ratio are…

Mann Corporation decided to issue common stock and used the $120,000 proceeds to retire all of its outstanding bonds on January 1, 2020. The following information is available for the company for 2019 and 2020. Net income Average stockholder's equity Total assets Current liabilities Total liabilities Return on common stockholders' equity 2020 $120,000 1,000,000 100,000 360,000 2019 1,200,000 1,200,000 12.5% $100,000 800,000 100,000 480,000 12.0%

Mann Corporation decided to issue common stock and used the $120,000 proceeds to retire all of its outstanding bonds on January 1, 2020. The following information is available for the company for 2019 and 2020. Net income Average stockholder's equity Total assets Current liabilities Total liabilities Return on common stockholders' equity 2020 $120,000 1,000,000 100,000 360,000 2019 1,200,000 1,200,000 12.5% $100,000 800,000 100,000 480,000 12.0%

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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