sales 201,000Equipment 128,000Selling, general, and administrative expenses 32,000Common stock (8,700 shares) 90,000Accounts payable 14,300Retained earnings, 1/1/19 30,000Interest expense 5,600Merchandise inventory 38,600Long-term debt 38,000Dividends declared and paid during 2019 16,200
Breanna Inc.
Time Remaining 2 hours 32 minutes 36 seconds
02:32:36Item 1
Time Remaining 2 hours 32 minutes 36 seconds
02:32:36The information on the following page was obtained from the records of Breanna Inc.:
| Accounts receivable | $ | 10,700 |
| 50,800 | ||
| Cost of goods sold | 123,000 | |
| Income tax expense | 8,000 | |
| Cash | 62,000 | |
| Net sales | 201,000 | |
| Equipment | 128,000 | |
| Selling, general, and administrative expenses | 32,000 | |
| Common stock (8,700 shares) | 90,000 | |
| Accounts payable | 14,300 | |
| 30,000 | ||
| Interest expense | 5,600 | |
| Merchandise inventory | 38,600 | |
| Long-term debt | 38,000 | |
| Dividends declared and paid during 2019 | 16,200 | |
Except as otherwise indicated, assume that all
Required:
- Prepare an income statement and statement of changes in
stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Breanna Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e. - What is the company's average income tax rate?
- What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.
- What is the par value per share of common stock?
- What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?
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