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Measures of liquidity, Solvency and Profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 Net income Dividends: On preferred stock On common stock $5,375,000 $4,545,000 $900,000 $925,000 (45,000) (50,000) (45,000) (50,000) Increase in retained earnings $830,000 Retained earnings, December 31 $6,180,000 $5,375,000 $805,000

Measures of liquidity, Solvency and Profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 Net income Dividends: On preferred stock On common stock $5,375,000 $4,545,000 $900,000 $925,000 (45,000) (50,000) (45,000) (50,000) Increase in retained earnings $830,000 Retained earnings, December 31 $6,180,000 $5,375,000 $805,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Measures of liquidity, Solvency and Profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y1 Retained earnings, January 1 $5,375,000 $4,545,000 $925,000 20Y2 Net income $900,000 Dividends: On preferred stock On common stock (45,000) (45,000) (50,000) $830,000 Retained earnings, December 31 $6,180,000 $5,375,000 (50,000) $805,000 Increase in retained earnings Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20oY2 and 20Y1 20Y2 20Y1 Sales $10,000,000 $9,400,000 Cost of goods sold (5,350,000) (4,950,000) $4,650,000 $4,450,000 Gross profit Selling expenses $(2,000,000) $(1,880,000) Administrative expenses (1,500,000) (1,410,000) $(3,500,000) $(3,290,000) Total operating expenses Operating income $1,150,000 $1,160,000 Other revenue and expense: Other revenue 150,000 140,000 Other expense (interest) (170,000) (150,000) Income before income tax expense $1,130,000 $1,150,000 (230,000) $900,000 (225,000) $925,000 Income tax expense Net income Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Υ1 Assets Current assets: Cash $500,000 $400,000
Transcribed Image Text:Measures of liquidity, Solvency and Profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y1 Retained earnings, January 1 $5,375,000 $4,545,000 $925,000 20Y2 Net income $900,000 Dividends: On preferred stock On common stock (45,000) (45,000) (50,000) $830,000 Retained earnings, December 31 $6,180,000 $5,375,000 (50,000) $805,000 Increase in retained earnings Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20oY2 and 20Y1 20Y2 20Y1 Sales $10,000,000 $9,400,000 Cost of goods sold (5,350,000) (4,950,000) $4,650,000 $4,450,000 Gross profit Selling expenses $(2,000,000) $(1,880,000) Administrative expenses (1,500,000) (1,410,000) $(3,500,000) $(3,290,000) Total operating expenses Operating income $1,150,000 $1,160,000 Other revenue and expense: Other revenue 150,000 140,000 Other expense (interest) (170,000) (150,000) Income before income tax expense $1,130,000 $1,150,000 (230,000) $900,000 (225,000) $925,000 Income tax expense Net income Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Υ1 Assets Current assets: Cash $500,000 $400,000
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