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The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid-in capital in excess of par-common stock Retained earnings Year 2 Year 1 $613,600 $559,300 61,100 48,500 921,800 713,800 102,600 86,500 312,200 232,700 80,700 80,700 505,300 505,300 60,600 60,600 535,100 355,800

The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid-in capital in excess of par-common stock Retained earnings Year 2 Year 1 $613,600 $559,300 61,100 48,500 921,800 713,800 102,600 86,500 312,200 232,700 80,700 80,700 505,300 505,300 60,600 60,600 535,100 355,800

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid-in capital in excess of par-common stock Retained earnings Using the balance sheets for Kellman Company, if net income is $114,200 and interest expense is $47,700 for Year 2, what is the return on common stockholders' equity for Year 2 (round percent to two decimal points)? O a. 12.39% O b. 11.29% Year 2 Year 1 $613,600 $559,300 61,100 48,500 921,800 713,800 102,600 86,500 312,200 232,700 80,700 80,700 505,300 505,300 60,600 60,600 535,100 355,800 O c. 12.83% O d. 10.37%
Transcribed Image Text:The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid-in capital in excess of par-common stock Retained earnings Using the balance sheets for Kellman Company, if net income is $114,200 and interest expense is $47,700 for Year 2, what is the return on common stockholders' equity for Year 2 (round percent to two decimal points)? O a. 12.39% O b. 11.29% Year 2 Year 1 $613,600 $559,300 61,100 48,500 921,800 713,800 102,600 86,500 312,200 232,700 80,700 80,700 505,300 505,300 60,600 60,600 535,100 355,800 O c. 12.83% O d. 10.37%
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