Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 61 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $3,350,500 $2,822,200 Net income 748,800 578,100 Dividends: On preferred stock (9,800) (9,800) On common stock (40,000) (40,000) Retained earnings, December 31 $4,049,500 $3,350,500 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $4,270,500 $3,934,620 Cost of merchandise sold 1,608,920 1,480,210 Gross profit $2,661,580 $2,454,410 Selling expenses $844,790 $1,058,190 Administrative expenses 719,640 621,470 Total operating expenses $1,564,430 $1,679,660 Income from operations $1,097,150 $774,750 Other revenue and expense: Other revenue 57,750 49,450 Other expense (interest) (304,000) (167,200) Income before income tax expense $850,900 $657,000 Income tax expense 102,100 78,900 Net income $748,800 $578,100 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $736,150 $761,910 Marketable securities 1,114,170 1,262,590 Accounts receivable (net) 846,800 795,700 Inventories 627,800 481,800 Prepaid expenses 139,275 152,380 Total current assets $3,464,195 $3,454,380 Long-term investments 2,139,855 524,939 Property, plant, and equipment (net) 4,940,000 4,446,000 Total assets $10,544,050 $8,425,319 Liabilities Current liabilities $1,194,550 $1,484,819 Long-term liabilities: Mortgage note payable, 8% $1,710,000 $0 Bonds payable, 8% 2,090,000 2,090,000 Total long-term liabilities $3,800,000 $2,090,000 Total liabilities $4,994,550 $3,574,819 Stockholders' Equity Preferred $0.70 stock, $50 par $700,000 $700,000 Common stock, $10 par 800,000 800,000 Retained earnings 4,049,500 3,350,500 Total stockholders' equity $5,549,500 $4,850,500 Total liabilities and stockholders' equity $10,544,050 $8,425,319 Required: Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year
Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 61 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $3,350,500 $2,822,200 Net income 748,800 578,100 Dividends: On preferred stock (9,800) (9,800) On common stock (40,000) (40,000) Retained earnings, December 31 $4,049,500 $3,350,500 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $4,270,500 $3,934,620 Cost of merchandise sold 1,608,920 1,480,210 Gross profit $2,661,580 $2,454,410 Selling expenses $844,790 $1,058,190 Administrative expenses 719,640 621,470 Total operating expenses $1,564,430 $1,679,660 Income from operations $1,097,150 $774,750 Other revenue and expense: Other revenue 57,750 49,450 Other expense (interest) (304,000) (167,200) Income before income tax expense $850,900 $657,000 Income tax expense 102,100 78,900 Net income $748,800 $578,100 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $736,150 $761,910 Marketable securities 1,114,170 1,262,590 Accounts receivable (net) 846,800 795,700 Inventories 627,800 481,800 Prepaid expenses 139,275 152,380 Total current assets $3,464,195 $3,454,380 Long-term investments 2,139,855 524,939 Property, plant, and equipment (net) 4,940,000 4,446,000 Total assets $10,544,050 $8,425,319 Liabilities Current liabilities $1,194,550 $1,484,819 Long-term liabilities: Mortgage note payable, 8% $1,710,000 $0 Bonds payable, 8% 2,090,000 2,090,000 Total long-term liabilities $3,800,000 $2,090,000 Total liabilities $4,994,550 $3,574,819 Stockholders' Equity Preferred $0.70 stock, $50 par $700,000 $700,000 Common stock, $10 par 800,000 800,000 Retained earnings 4,049,500 3,350,500 Total stockholders' equity $5,549,500 $4,850,500 Total liabilities and stockholders' equity $10,544,050 $8,425,319 Required: Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Measures of liquidity, Solvency, and Profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 61 on December 31, 20Y2.
Marshall Inc. | |||||
Comparative |
|||||
For the Years Ended December 31, 20Y2 and 20Y1 | |||||
20Y2 | 20Y1 | ||||
Retained earnings, January 1 | $3,350,500 | $2,822,200 | |||
Net income | 748,800 | 578,100 | |||
Dividends: | |||||
On |
(9,800) | (9,800) | |||
On common stock | (40,000) | (40,000) | |||
Retained earnings, December 31 | $4,049,500 | $3,350,500 |
Marshall Inc. | ||||
Comparative Income Statement | ||||
For the Years Ended December 31, 20Y2 and 20Y1 | ||||
20Y2 | 20Y1 | |||
Sales | $4,270,500 | $3,934,620 | ||
Cost of merchandise sold | 1,608,920 | 1,480,210 | ||
Gross profit | $2,661,580 | $2,454,410 | ||
Selling expenses | $844,790 | $1,058,190 | ||
Administrative expenses | 719,640 | 621,470 | ||
Total operating expenses | $1,564,430 | $1,679,660 | ||
Income from operations | $1,097,150 | $774,750 | ||
Other revenue and expense: | ||||
Other revenue | 57,750 | 49,450 | ||
Other expense (interest) | (304,000) | (167,200) | ||
Income before income tax expense | $850,900 | $657,000 | ||
Income tax expense | 102,100 | 78,900 | ||
Net income | $748,800 | $578,100 |
Marshall Inc. | ||||||
Comparative Balance Sheet | ||||||
December 31, 20Y2 and 20Y1 | ||||||
20Y2 | 20Y1 | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $736,150 | $761,910 | ||||
Marketable securities | 1,114,170 | 1,262,590 | ||||
846,800 | 795,700 | |||||
Inventories | 627,800 | 481,800 | ||||
Prepaid expenses | 139,275 | 152,380 | ||||
Total current assets | $3,464,195 | $3,454,380 | ||||
Long-term investments | 2,139,855 | 524,939 | ||||
Property, plant, and equipment (net) | 4,940,000 | 4,446,000 | ||||
Total assets | $10,544,050 | $8,425,319 | ||||
Liabilities | ||||||
Current liabilities | $1,194,550 | $1,484,819 | ||||
Long-term liabilities: | ||||||
Mortgage note payable, 8% | $1,710,000 | $0 | ||||
Bonds payable, 8% | 2,090,000 | 2,090,000 | ||||
Total long-term liabilities | $3,800,000 | $2,090,000 | ||||
Total liabilities | $4,994,550 | $3,574,819 | ||||
Preferred $0.70 stock, $50 par | $700,000 | $700,000 | ||||
Common stock, $10 par | 800,000 | 800,000 | ||||
Retained earnings | 4,049,500 | 3,350,500 | ||||
Total stockholders' equity | $5,549,500 | $4,850,500 | ||||
Total liabilities and stockholders' equity | $10,544,050 | $8,425,319 |
Required:
Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year
![8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ab675ce-2e40-481e-8381-32ae8424bad9%2F7b5c4cd7-d9f2-4d86-8e8e-2a2e1ff9073d%2Flku6jit_processed.png&w=3840&q=75)
Transcribed Image Text:8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education