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
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6743881-05fa-4a94-b713-a08091e31fed%2F9d1512e8-f573-49c0-ba2a-da55b3696530%2F52ta4i.jpeg&w=3840&q=75)
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
![](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6743881-05fa-4a94-b713-a08091e31fed%2F9d1512e8-f573-49c0-ba2a-da55b3696530%2Fb18dffj.jpeg&w=3840&q=75)
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