The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,071,200 $2,584,300 Net income 720,000 529,300 Total $3,791,200 $3,113,600 Dividends: On preferred stock $9,100 $9,100 On common stock 33,300 33,300 Total dividends $42,400 $42,400 Retained earnings, December 31 $3,748,800 $3,071,200 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,479,280 $4,126,940 Cost of goods sold 1,503,070 1,382,820 Gross profit $2,976,210 $2,744,120 Selling expenses $1,043,780 $1,281,450 Administrative expenses 889,140 752,590 Total operating expenses $1,932,920 $2,034,040 Income from operations $1,043,290 $710,080 Other revenue 54,910 45,320 $1,098,200 $755,400 Other expense (interest) 280,000 154,400 Income before income tax $818,200 $601,000 Income tax expense 98,200 71,700 Net income $720,000 $529,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Assets Current assets Cash $785,200 $744,940 Marketable securities 1,188,410 1,234,470 Accounts receivable (net) 781,100 737,300 Inventories 584,000 452,600 Prepaid expenses 148,542 148,990 Total current assets $3,487,252 $3,318,300 Long-term investments 2,076,468 995,123 Property, plant, and equipment (net) 4,200,000 3,780,000 Total assets $9,763,720 $8,093,423 Liabilities Current liabilities $1,124,920 $1,702,223 Long-term liabilities: Mortgage note payable, 8% $1,570,000 $0 Bonds payable, 8% 1,930,000 1,930,000 Total long-term liabilities $3,500,000 $1,930,000 Total liabilities $4,624,920 $3,632,223 Stockholders' Equity Preferred $0.70 stock, $50 par $650,000 $650,000 Common stock, $10 par 740,000 740,000 Retained earnings 3,748,800 3,071,200 Total stockholders' equity $5,138,800 $4,461,200 Total liabilities and stockholders' equity $9,763,720 $8,093,423 Required:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Measures of liquidity

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Υ2
20Υ1
Retained earnings, January 1
$3,071,200
$2,584,300
Net income
720,000
529,300
Total
$3,791,200
$3,113,600
Dividends:
On preferred stock
$9,100
$9,100
On common stock
33,300
33,300
Total dividends
$42,400
$42,400
Retained earnings, December 31
$3,748,800
$3,071,200
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Υ2
20Y1
Sales
$4,479,280
$4,126,940
Cost of goods sold
1,503,070
1,382,820
Gross profit
$2,976,210
$2,744,120
Selling expenses
$1,043,780
$1,281,450
Administrative expenses
889,140
752,590
Total operating expenses
$1,932,920
$2,034,040
Income from operations
$1,043,290
$710,080
Other revenue
54,910
45,320
$1,098,200
$755,400
Other expense (interest)
280,000
154,400
Income before income tax
$818,200
$601,000
Income tax expense
98,200
71,700
Net income
$720,000
$529,300
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Υ2
20Υ1
Assets
Current assets
Cash
$785,200
$744,940
Marketable securities
1,188,410
1,234,470
Accounts receivable (net)
781,100
737,300
Inventories
584,000
452,600
Prepaid expenses
148,542
148,990
Total current assets
$3,487,252
$3,318,300
Long-term investments
2,076,468
995,123
Property, plant, and equipment (net)
4,200,000
3,780,000
Total assets
$9,763,720
$8,093,423
Liabilities
Current liabilities
$1,124,920
$1,702,223
Long-term liabilities:
Mortgage note payable, 8%
$1,570,000
$0
Bonds payable, 8%
1,930,000
1,930,000
Total long-term liabilities
$3,500,000
$1,930,000
Total liabilities
$4,624,920
$3,632,223
Stockholders' Equity
Preferred $0.70 stock, $50 par
$650,000
$650,000
Common stock, $10 par
740,000
740,000
Retained earnings
3,748,800
3,071,200
Total stockholders' equity
$5,138,800
$4,461,200
Total liabilities and stockholders' equity
$9,763,720
$8,093,423
Required:
Transcribed Image Text:The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 69 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,071,200 $2,584,300 Net income 720,000 529,300 Total $3,791,200 $3,113,600 Dividends: On preferred stock $9,100 $9,100 On common stock 33,300 33,300 Total dividends $42,400 $42,400 Retained earnings, December 31 $3,748,800 $3,071,200 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,479,280 $4,126,940 Cost of goods sold 1,503,070 1,382,820 Gross profit $2,976,210 $2,744,120 Selling expenses $1,043,780 $1,281,450 Administrative expenses 889,140 752,590 Total operating expenses $1,932,920 $2,034,040 Income from operations $1,043,290 $710,080 Other revenue 54,910 45,320 $1,098,200 $755,400 Other expense (interest) 280,000 154,400 Income before income tax $818,200 $601,000 Income tax expense 98,200 71,700 Net income $720,000 $529,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Assets Current assets Cash $785,200 $744,940 Marketable securities 1,188,410 1,234,470 Accounts receivable (net) 781,100 737,300 Inventories 584,000 452,600 Prepaid expenses 148,542 148,990 Total current assets $3,487,252 $3,318,300 Long-term investments 2,076,468 995,123 Property, plant, and equipment (net) 4,200,000 3,780,000 Total assets $9,763,720 $8,093,423 Liabilities Current liabilities $1,124,920 $1,702,223 Long-term liabilities: Mortgage note payable, 8% $1,570,000 $0 Bonds payable, 8% 1,930,000 1,930,000 Total long-term liabilities $3,500,000 $1,930,000 Total liabilities $4,624,920 $3,632,223 Stockholders' Equity Preferred $0.70 stock, $50 par $650,000 $650,000 Common stock, $10 par 740,000 740,000 Retained earnings 3,748,800 3,071,200 Total stockholders' equity $5,138,800 $4,461,200 Total liabilities and stockholders' equity $9,763,720 $8,093,423 Required:
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 4 images

Blurred answer
Knowledge Booster
Balance Sheet Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education