Total assets Notes payable (6% interest) Common stock Preferred 2.5% stock, $100 par (no change during year) Retained earnings 20Y7 $5,200,000 2,500,000 250,000 Return on total assets 500,000 1,574,000 December 31 20Y6 $5,000,000 2,500,000 250,000 500,000 1,222,000 < The 20Y7 net income was $411,000, and the 20Y6 net income was $462,500. No dividends on common stock were declared between 201 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. 20Y7 a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7. Round percentages to one decimal place. 19.13 % X % 20Y5 $4,800,000 2,500,000 250,000 Return on stockholders' equity Return on common stockholders' equity h The profitability ratios indicate that the company's profitability has deteriorated % 500,000 750,000 20Y6 94.0 X % % % ✓. Because the return on common

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Total assets
Notes payable (6% interest)
Common stock
Preferred 2.5% stock, $100 par
(no change during year)
Retained earnings
20Y7
$5,200,000
2,500,000
250,000
Return on total assets
December 31
20Y6
$5,000,000
2,500,000
250,000
500,000
1,222,000
500,000
1,574,000
<
The 20Y7 net income was $411,000, and the 20Y6 net income was $462,500. No dividends on common stock were declared between 201
and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7.
20Y7
a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years
20Y6 and 20Y7. Round percentages to one decimal place.
19.13
%
X %
20Y5
$4,800,000
2,500,000
250,000
Return on stockholders' equity
Return on common stockholders' equity
h The profitability ratios indicate that the company's profitability has deteriorated
%
500,000
750,000
20Y6
94.0
X %
%
%
✓. Because the return on common
Transcribed Image Text:Total assets Notes payable (6% interest) Common stock Preferred 2.5% stock, $100 par (no change during year) Retained earnings 20Y7 $5,200,000 2,500,000 250,000 Return on total assets December 31 20Y6 $5,000,000 2,500,000 250,000 500,000 1,222,000 500,000 1,574,000 < The 20Y7 net income was $411,000, and the 20Y6 net income was $462,500. No dividends on common stock were declared between 201 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. 20Y7 a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders' equity for the years 20Y6 and 20Y7. Round percentages to one decimal place. 19.13 % X % 20Y5 $4,800,000 2,500,000 250,000 Return on stockholders' equity Return on common stockholders' equity h The profitability ratios indicate that the company's profitability has deteriorated % 500,000 750,000 20Y6 94.0 X % % % ✓. Because the return on common
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