Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Mortgage note payable, 6%, issued 2005, due 2021 2,000,000 Total liabilities $3,000,000 Stockholders' equity: Preferred S10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 $2,500,000 Preferred dividends $100,000 Common dividends 400,000 500,000 Balance, end of year 2,000,000 Total stockholders' equity $5,000,000 Sales $18,900,000 Interest expense $120,000 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. Round to one decimal place.

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 21E
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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. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000
Mortgage note payable, 6%, issued 2005, due 2021 2,000,000 Total liabilities $3,000,000 Stockholders' equity: Preferred S10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year)
2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 $2,500,000 Preferred dividends $100,000 Common dividends 400,000 500,000 Balance, end of year 2,000,000 Total stockholders'
equity $5,000,000 Sales $18,900,000 Interest expense $120,000 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. Round to one decimal place.
Transcribed Image Text:Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Mortgage note payable, 6%, issued 2005, due 2021 2,000,000 Total liabilities $3,000,000 Stockholders' equity: Preferred S10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 $2,500,000 Preferred dividends $100,000 Common dividends 400,000 500,000 Balance, end of year 2,000,000 Total stockholders' equity $5,000,000 Sales $18,900,000 Interest expense $120,000 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. Round to one decimal place.
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