The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Retained earnings, January 1 $3,716,000.00 $3,266,000.00 3 Net income 630,000.00 560,000.00 4 Total $4,346,000.00 $3,826,000.00 5 Dividends: 6 On preferred stock $10,000.00 $10,000.00 7 On common stock 100,000.00 100,000.00 8 Total dividends $110,000.00 $110,000.00 9 Retained earnings, December 31 $4,236,000.00 $3,716,000.00 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $10,860,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,440,000.00 4 Gross profit $4,860,000.00 $4,560,000.00 5 Selling expenses $2,160,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,787,500.00 $3,500,000.00 8 Income from operations $1,072,500.00 $1,060,000.00 9 Other revenue 99,500.00 20,000.00 10 $1,172,000.00 $1,080,000.00 11 Other expense (interest) 132,000.00 120,000.00 12 Income before income tax $1,040,000.00 $960,000.00 13 Income tax expense 410,000.00 400,000.00 14 Net income $630,000.00 $560,000.00 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Assets 3 Current assets: 4 Cash $1,050,000.00 $950,000.00 5 Marketable securities 301,000.00 420,000.00 6 Accounts receivable (net) 586,000.00 500,000.00 7 Inventories 410,000.00 380,000.00 8 Prepaid expenses 107,000.00 20,000.00 9 Total current assets $2,454,000.00 $2,270,000.00 10 Long-term investments 800,000.00 800,000.00 11 Property, plant, and equipment (net) 5,750,000.00 5,184,000.00 12 Total assets $9,004,000.00 $8,254,000.00 13 Liabilities 14 Current liabilities $818,000.00 $788,000.00 15 Long-term liabilities: 16 Mortgage note payable, 6%, $200,000.00 $0.00 17 Bonds payable, 4%, 3,000,000.00 3,000,000.00 18 Total long-term liabilities $3,200,000.00 $3,000,000.00 19 Total liabilities $4,018,000.00 $3,788,000.00 20 Stockholders’ Equity 21 Preferred 4% stock, $5 par $250,000.00 $250,000.00 22 Common stock, $5 par 500,000.00 500,000.00 23 Retained earnings 4,236,000.00 3,716,000.00 24 Total stockholders’ equity $4,986,000.00 $4,466,000.00 25 Total liabilities and stockholders’ equity $9,004,000.00 $8,254,000.00 Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): Assume a 365-day year. 1. Working capital 2. Current ratio 3. Quick ratio
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Retained earnings, January 1 $3,716,000.00 $3,266,000.00 3 Net income 630,000.00 560,000.00 4 Total $4,346,000.00 $3,826,000.00 5 Dividends: 6 On preferred stock $10,000.00 $10,000.00 7 On common stock 100,000.00 100,000.00 8 Total dividends $110,000.00 $110,000.00 9 Retained earnings, December 31 $4,236,000.00 $3,716,000.00 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Sales $10,860,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,440,000.00 4 Gross profit $4,860,000.00 $4,560,000.00 5 Selling expenses $2,160,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,787,500.00 $3,500,000.00 8 Income from operations $1,072,500.00 $1,060,000.00 9 Other revenue 99,500.00 20,000.00 10 $1,172,000.00 $1,080,000.00 11 Other expense (interest) 132,000.00 120,000.00 12 Income before income tax $1,040,000.00 $960,000.00 13 Income tax expense 410,000.00 400,000.00 14 Net income $630,000.00 $560,000.00 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 1 20Y2 20Y1 2 Assets 3 Current assets: 4 Cash $1,050,000.00 $950,000.00 5 Marketable securities 301,000.00 420,000.00 6 Accounts receivable (net) 586,000.00 500,000.00 7 Inventories 410,000.00 380,000.00 8 Prepaid expenses 107,000.00 20,000.00 9 Total current assets $2,454,000.00 $2,270,000.00 10 Long-term investments 800,000.00 800,000.00 11 Property, plant, and equipment (net) 5,750,000.00 5,184,000.00 12 Total assets $9,004,000.00 $8,254,000.00 13 Liabilities 14 Current liabilities $818,000.00 $788,000.00 15 Long-term liabilities: 16 Mortgage note payable, 6%, $200,000.00 $0.00 17 Bonds payable, 4%, 3,000,000.00 3,000,000.00 18 Total long-term liabilities $3,200,000.00 $3,000,000.00 19 Total liabilities $4,018,000.00 $3,788,000.00 20 Stockholders’ Equity 21 Preferred 4% stock, $5 par $250,000.00 $250,000.00 22 Common stock, $5 par 500,000.00 500,000.00 23 Retained earnings 4,236,000.00 3,716,000.00 24 Total stockholders’ equity $4,986,000.00 $4,466,000.00 25 Total liabilities and stockholders’ equity $9,004,000.00 $8,254,000.00 Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): Assume a 365-day year. 1. Working capital 2. Current ratio 3. Quick ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
|
Marshall Inc.
|
|
Comparative
|
|
For the Years Ended December 31, 20Y2 and 20Y1
|
|
1
|
|
20Y2
|
20Y1
|
|
2
|
Retained earnings, January 1
|
$3,716,000.00
|
$3,266,000.00
|
|
3
|
Net income
|
630,000.00
|
560,000.00
|
|
4
|
Total
|
$4,346,000.00
|
$3,826,000.00
|
|
5
|
Dividends:
|
|
|
|
6
|
On
|
$10,000.00
|
$10,000.00
|
|
7
|
On common stock
|
100,000.00
|
100,000.00
|
|
8
|
Total dividends
|
$110,000.00
|
$110,000.00
|
|
9
|
Retained earnings, December 31
|
$4,236,000.00
|
$3,716,000.00
|
|
Marshall Inc.
|
|
Comparative Income Statement
|
|
For the Years Ended December 31, 20Y2 and 20Y1
|
|
1
|
|
20Y2
|
20Y1
|
|
2
|
Sales
|
$10,860,000.00
|
$10,000,000.00
|
|
3
|
Cost of goods sold
|
6,000,000.00
|
5,440,000.00
|
|
4
|
Gross profit
|
$4,860,000.00
|
$4,560,000.00
|
|
5
|
Selling expenses
|
$2,160,000.00
|
$2,000,000.00
|
|
6
|
Administrative expenses
|
1,627,500.00
|
1,500,000.00
|
|
7
|
Total operating expenses
|
$3,787,500.00
|
$3,500,000.00
|
|
8
|
Income from operations
|
$1,072,500.00
|
$1,060,000.00
|
|
9
|
Other revenue
|
99,500.00
|
20,000.00
|
|
10
|
|
$1,172,000.00
|
$1,080,000.00
|
|
11
|
Other expense (interest)
|
132,000.00
|
120,000.00
|
|
12
|
Income before income tax
|
$1,040,000.00
|
$960,000.00
|
|
13
|
Income tax expense
|
410,000.00
|
400,000.00
|
|
14
|
Net income
|
$630,000.00
|
$560,000.00
|
|
Marshall Inc.
|
|
Comparative
|
|
December 31, 20Y2 and 20Y1
|
|
1
|
|
20Y2
|
20Y1
|
|
2
|
Assets
|
|
|
|
3
|
Current assets:
|
|
|
|
4
|
Cash
|
$1,050,000.00
|
$950,000.00
|
|
5
|
Marketable securities
|
301,000.00
|
420,000.00
|
|
6
|
|
586,000.00
|
500,000.00
|
|
7
|
Inventories
|
410,000.00
|
380,000.00
|
|
8
|
Prepaid expenses
|
107,000.00
|
20,000.00
|
|
9
|
Total current assets
|
$2,454,000.00
|
$2,270,000.00
|
|
10
|
Long-term investments
|
800,000.00
|
800,000.00
|
|
11
|
Property, plant, and equipment (net)
|
5,750,000.00
|
5,184,000.00
|
|
12
|
Total assets
|
$9,004,000.00
|
$8,254,000.00
|
|
13
|
Liabilities
|
|
|
|
14
|
Current liabilities
|
$818,000.00
|
$788,000.00
|
|
15
|
Long-term liabilities:
|
|
|
|
16
|
Mortgage note payable, 6%,
|
$200,000.00
|
$0.00
|
|
17
|
Bonds payable, 4%,
|
3,000,000.00
|
3,000,000.00
|
|
18
|
Total long-term liabilities
|
$3,200,000.00
|
$3,000,000.00
|
|
19
|
Total liabilities
|
$4,018,000.00
|
$3,788,000.00
|
|
20
|
|
|
|
|
21
|
Preferred 4% stock, $5 par
|
$250,000.00
|
$250,000.00
|
|
22
|
Common stock, $5 par
|
500,000.00
|
500,000.00
|
|
23
|
Retained earnings
|
4,236,000.00
|
3,716,000.00
|
|
24
|
Total stockholders’ equity
|
$4,986,000.00
|
$4,466,000.00
|
|
25
|
Total liabilities and stockholders’ equity
|
$9,004,000.00
|
$8,254,000.00
|
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): Assume a 365-day year.
| 1. | |
| 2. | |
| 3. | Quick ratio |
| 4. | Accounts receivable turnover |
| 5. | Number of days’ sales in receivables |
| 6. | Inventory turnover |
| 7. | Number of days’ sales in inventory |
| 8. | Ratio of fixed assets to long-term liabilities |
| 9. | Ratio of liabilities to stockholders’ equity |
| 10. | Times interest earned |
| 11. | Asset turnover |
| 12. | Return on total assets |
| 13. | Return on stockholders’ equity |
| 14. | Return on common stockholders’ equity |
| 15. | Earnings per share on common stock |
| 16. | Price-earnings ratio |
| 17. | Dividends per share of common stock |
| 18. | Dividend yield |
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