The financial statements of ABC Co., appear below: ABC Co. Comparative Balance Sheet December 31, 2014 2014 2013 ASSETS Cash $25,000 $40,000 Marketable Securities 20,000 60,000 Accounts Receivable (net) 40,000 30,000 Inventory 150,000 170,000 Property, Plant and Equipment (net) 170,000 200,000 Total Assets $405,000 $500,000 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable $25,000 $30,000 Short-term Notes Payable 40,000 90,000 Bonds Payable 75,000 160,000 Common Stock 175,000 145,000 Retained Earnings 90,000 75,000 Total Liabilities and Stockholder's Equity $405,000 $500,000 ABC Co. Income Statement For the Year Ended December 31, 2014 Net Sales $360,000 Cost of Goods Sold 184,000 Gross Profit 176,000 Expenses Interest Expense 21,000 Selling Expense 30,000 Administrative Expense 20,000 Total Expenses 71,000 Income before income taxes 105,000 Income tax expense 30,000 Net income $75,000 Additional Information: a. Cash dividends of $50,000 were declared and paid in 2014. b. Weighted average number of shares of common stock outstanding during 2014 was 62,000 shares. c. Market value of common stock on December 31, 2014 was $15 per share. d. Net cash provided by operating activities for 2014 was $65,000. Compute for the company's profit margin ratio.
The financial statements of ABC Co., appear below:
ABC Co. Comparative Balance Sheet December 31, 2014
2014 2013
ASSETS
Cash $25,000 $40,000
Marketable Securities 20,000 60,000
Accounts Receivable (net) 40,000 30,000
Inventory 150,000 170,000
Property, Plant and Equipment (net) 170,000 200,000
Total Assets $405,000 $500,000
LIABILITIES AND
Accounts Payable $25,000 $30,000
Short-term Notes Payable 40,000 90,000
Bonds Payable 75,000 160,000
Common Stock 175,000 145,000
Total Liabilities and Stockholder's Equity $405,000 $500,000
ABC Co. Income Statement For the Year Ended December 31, 2014
Net Sales $360,000
Cost of Goods Sold 184,000
Gross Profit 176,000
Expenses
Interest Expense 21,000
Selling Expense 30,000
Administrative Expense 20,000
Total Expenses 71,000
Income before income taxes 105,000
Income tax expense 30,000
Net income $75,000
Additional Information:
a. Cash dividends of $50,000 were declared and paid in 2014.
b. Weighted average number of shares of common stock outstanding during 2014 was 62,000 shares.
c. Market value of common stock on December 31, 2014 was $15 per share.
d. Net cash provided by operating activities for 2014 was $65,000.
Compute for the company's profit margin ratio.
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