Property, plant, and equipment (net) $ 3,200,000 Liabilities: Current liabilities..... $1,000,000 Note payable, 6%, due in 15 years Total liabilities ... Stockholders' equity: Preferred $10 stock, $100 par (no change during year)... 2,000,000 $ 3,000,000 $ 1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year.... Net income..... $1,570,000 930,000 $2,500,000 $ 100,000 Preferred dividends . Common dividends 400,000 500,000 Balance, end of year.. 2,000,000 $ 5000,000 $18,900,000 $ 120,000 Total stockholders'equity . Sales .... Interest expense
Property, plant, and equipment (net) $ 3,200,000 Liabilities: Current liabilities..... $1,000,000 Note payable, 6%, due in 15 years Total liabilities ... Stockholders' equity: Preferred $10 stock, $100 par (no change during year)... 2,000,000 $ 3,000,000 $ 1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year.... Net income..... $1,570,000 930,000 $2,500,000 $ 100,000 Preferred dividends . Common dividends 400,000 500,000 Balance, end of year.. 2,000,000 $ 5000,000 $18,900,000 $ 120,000 Total stockholders'equity . Sales .... Interest expense
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Six measures of solvency or profitability
The following data were taken from the financial .statements of Gates Inc. for the current fiscal year
Assuming that long-term investments totaled $3,000,000 throughout the year and that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following: (A) ratio of fixed assets to long-term liabilities, (B) ratio of liabilities to
Transcribed Image Text:Property, plant, and equipment (net)
$ 3,200,000
Liabilities:
Current liabilities.....
$1,000,000
Note payable, 6%, due in 15 years
Total liabilities ...
Stockholders' equity:
Preferred $10 stock, $100 par (no change during year)...
2,000,000
$ 3,000,000
$ 1,000,000
Common stock, $10 par (no change during year)
2,000,000
Retained earnings:
Balance, beginning of year....
Net income.....
$1,570,000
930,000 $2,500,000
$ 100,000
Preferred dividends .
Common dividends
400,000
500,000
Balance, end of year..
2,000,000
$ 5000,000
$18,900,000
$ 120,000
Total stockholders'equity .
Sales ....
Interest expense
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