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 Note payable, 6%, due in 15 years 2,000,000 $3,000,000 Total liabilities Stockholders' equity: Preferred $10 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 $1,570,000 930,000 $2,500,000 Net income $100,000 Preferred dividends 400,000 500,000 Common dividends 2,000,000 Balance, end of year $5,000,000 Total stockholders' equity $18,900,000 Sales $120,000 Interest expense 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. a. Ratio of fixed assets to long-term liabilities b. Ratio of liabilities to stockholders' equity c. Asset turnover d. Return on total assets e. Return on stockholders' equity f. Return on common stockholders' equity Next Previous Check My Work
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 Note payable, 6%, due in 15 years 2,000,000 $3,000,000 Total liabilities Stockholders' equity: Preferred $10 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 $1,570,000 930,000 $2,500,000 Net income $100,000 Preferred dividends 400,000 500,000 Common dividends 2,000,000 Balance, end of year $5,000,000 Total stockholders' equity $18,900,000 Sales $120,000 Interest expense 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. a. Ratio of fixed assets to long-term liabilities b. Ratio of liabilities to stockholders' equity c. Asset turnover d. Return on total assets e. Return on stockholders' equity f. Return on common stockholders' equity Next Previous Check My Work
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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
Note payable, 6%, due in 15 years
2,000,000
$3,000,000
Total liabilities
Stockholders' equity:
Preferred $10 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
930,000
$2,500,000
Net income
$100,000
Preferred dividends
400,000
500,000
Common dividends
2,000,000
Balance, end of year
$5,000,000
Total stockholders' equity
$18,900,000
Sales
$120,000
Interest expense
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.
a. Ratio of fixed assets to long-term liabilities
b. Ratio of liabilities to stockholders' equity
c. Asset turnover
d. Return on total assets
e. Return on stockholders' equity
f. Return on common stockholders' equity
Next
Previous
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Transcribed Image Text: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
Note payable, 6%, due in 15 years
2,000,000
$3,000,000
Total liabilities
Stockholders' equity:
Preferred $10 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
930,000
$2,500,000
Net income
$100,000
Preferred dividends
400,000
500,000
Common dividends
2,000,000
Balance, end of year
$5,000,000
Total stockholders' equity
$18,900,000
Sales
$120,000
Interest expense
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.
a. Ratio of fixed assets to long-term liabilities
b. Ratio of liabilities to stockholders' equity
c. Asset turnover
d. Return on total assets
e. Return on stockholders' equity
f. Return on common stockholders' equity
Next
Previous
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