Required: a. From the above income statement and balance sheet for Gerrard Construction Co. What other financial statements are required? b. Indicate the note disclosures that should be provided by Gerrard Construction Co. c. Assume that the balance of "Accounts Receivable, net" at December 31, 2018, was $8,800. Calculate the following activity measures for Gerrard Construction Co. for the year ended December 31, 2019: 1. Accounts receivable turnover. 2. Number of days' sales in accounts receivable. d. Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2019: 1. Debt ratio. 2. Debt/equity ratio. e. Gerrard Construction Co. wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of 4.1 million have on the company's debt ratio and debt/equity ratio? f. (1) Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (2) Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par value common stock outstanding throughout 2019, and that the market price per share of common stock at December 31, 2019, was $18.78. Calculate the following profitability measures for the year ended December 31, 2019: 1. Earnings per share of common stock. 2. Price/earnings ratio. 3. Dividend yield. 4. Dividend payout ratio.
Required: a. From the above income statement and balance sheet for Gerrard Construction Co. What other financial statements are required? b. Indicate the note disclosures that should be provided by Gerrard Construction Co. c. Assume that the balance of "Accounts Receivable, net" at December 31, 2018, was $8,800. Calculate the following activity measures for Gerrard Construction Co. for the year ended December 31, 2019: 1. Accounts receivable turnover. 2. Number of days' sales in accounts receivable. d. Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2019: 1. Debt ratio. 2. Debt/equity ratio. e. Gerrard Construction Co. wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of 4.1 million have on the company's debt ratio and debt/equity ratio? f. (1) Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (2) Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par value common stock outstanding throughout 2019, and that the market price per share of common stock at December 31, 2019, was $18.78. Calculate the following profitability measures for the year ended December 31, 2019: 1. Earnings per share of common stock. 2. Price/earnings ratio. 3. Dividend yield. 4. Dividend payout ratio.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do F1 thank you.
Transcribed Image Text:Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31,
2019, financial statements:
For the Year Ended December 31, 2019:
$ 30,200
11,300
Net revenues
Cost of services provided
Depreciation expense
Operating income
Interest expense
6,000
$ 12,900
3,200
Income tax expense
3,500
Net income
$ 6,200
At December 31, 2019:
Assets
Cash and short-term investments
$ 3,200
Accounts receivable, net
9,500
Property, plant, and equipment, net
83,400
Total assets
$ 96,100
Liabilities and Stockholders' Equity
Accounts payable
Income taxes payable
Notes payable (long term)
Paid-in capital
Retained earnings
$ 1,600
1,700
49,400
14,000
29,400
Total liabilities and stockholders' equity
$ 96,100
At December 31, 2018, total assets were $82,000 and total stockholders' equity was $37,900. There were no changes in notes payable
or paid-in capital during 2019.
Required:
a. From the above income statement and balance sheet for Gerrard Construction Co. What other financial statements are required?
b. Indicate the note disclosures that should be provided by Gerrard Construction Co.
c. Assume that the balance of "Accounts Receivable, net" at December 31, 2018, was $8,800. Calculate the following activity measures
for Gerrard Construction Co. for the year ended December 31, 2019:
1. Accounts receivable turnover.
2. Number of days' sales in accounts receivable.
d. Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2019:
1. Debt ratio.
2. Debt/equity ratio.
e. Gerrard Construction Co. wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact
(increase, decrease, or no effect) would a capital lease of 4.1 million have on the company's debt ratio and debt/equity ratio?
f. (1) Calculate the amount of dividends declared and paid during the year ended December 31, 2019.
(2) Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par value
common stock outstanding throughout 2019, and that the market price per share of common stock at December 31, 2019, was
$18.78. Calculate the following profitability measures for the year ended December 31, 2019:
1. Earnings per share of common stock.
2. Price/earnings ratio.
3. Dividend yield.
4. Dividend payout ratio.
Complete this auestion bv enterina vour answers in the tahs below.
Transcribed Image Text:ACCOu1les
payabie
Income taxes payable
Notes payable (long term)
Paid-in capital
Retained earnings
1,700
49,400
14,000
29,400
Total liabilities and stockholders' equity
$ 96,100
At December 31, 2018, total assets were $82,000 and total stockholders' equity was $37,900. There were no changes in notes payable
or paid-in capital during 2019.
Required:
a. From the above income statement and balance sheet for Gerrard Construction Co. What other financial statements are required?
b. Indicate the note disclosures that should be provided by Gerrard Construction Co.
c. Assume that the balance of "Accounts Receivable, net" at December 31, 2018, was $8,800. Calculate the following activity measures
for Gerrard Construction Co. for the year ended December 31, 2019:
1. Accounts receivable turnover.
2. Number of days' sales in accounts receivable.
d. Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2019:
1. Debt ratio.
2. Debt/equity ratio.
e. Gerrard Construction Co. wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact
(increase, decrease, or no effect) would a capital lease of 4.1 million have on the company's debt ratio and debt/equity ratio?
f. (1) Calculate the amount of dividends declared and paid during the year ended December 31, 2019.
(2) Review the answer from requirement f1 at this time. Assume that Gerrard Construction Co. had 1,026,000 shares of $1 par value
common stock outstanding throughout 2019, and that the market price per share of common stock at December 31, 2019, was
$18.78. Calculate the following profitability measures for the year ended December 31, 2019:
1. Earnings per share of common stock.
2. Price/earnings ratio.
3. Dividend yield.
4. Dividend payout ratio.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
Required D
Required E
Required F1
Required F2
Calculate the amount of dividends declared and paid during the year ended December 31, 2019. (Enter your answer in
thousands (i.e., 20,000 should be entered as 20).)
Dividends declared and paid
< Required E
Required F2
>
Expert Solution
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
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education