EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 2, Problem 9PROB
Summary Introduction
To determine:
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Firm L had net assets at the end of the year of $415,000. The only items affecting stockholders' equity during the year were net
income of $76,000 and dividends of $46,000.
Required:
Calculate Firm L's average stockholders' equity and return on equity (ROE).
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1
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1
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11
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At the beginning of the year, the net assets of Shannon Co. were $617,900. The only transactions affecting stockholders’ equity during the year were net income of $60,800 and dividends of $16,600.Required:Calculate Shannon Co.’s return on equity (ROE) % for the year.
During Year 2, Copernicus Corporation held a portfolio of available-for-sale securities having a cost of $185,000. There were no purchases or sales of investments during the year. The market values at the beginning and end of the year were $225,000 and $160,000, respectively. The net income for Year 2 was $180,000, and no dividends were paid during the year. The Stockholders’ Equity section of the balance sheet was as follows on December 31, Year 1: Copernicus Corporation Stockholders’ Equity December 31, Year 1Common stock $ 50,000Paid-in capital in excess of par 250,000Retained earnings 340,000Unrealized gain on available-for-sale investments 40,000 Total…
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- The stockyholder's section of the balance sheet contains such as the following . Common stock . Preferred stock .Additional paid in capital . Other accumulated comprehensive income .retained earnings It is important to understand how changes in the accounts impact the balance sheet and the financial positions. Ginseng inc. Has $200, 000 of 5%, $10 par value preferred and $450,000 of $5 par value common stock issued outstanding on Dec.31, 2021. There were no stock issuance, stock splits or dividends for 2021. The organization's calender year end is Dec. 31, 2021. The preferred stock did not receive any dividends for 2019 or 2020 because the company did not have adequate cash reserves to pay out dividends. The preferred stock has a mix characteristics. . 10% of the preferred stock is noncumulative, nonparticipating . 20% of the preferred stock is cumulatuve , nonparticipating .20% of the preferred stock is nonculative, participating .50% of the preferred stock is cumulatuve,…arrow_forwardDuring Year 2, Copernicus Corporation held a portfolio of available-for-sale securities having a cost of $183,300. There were no purchases or sales of investments during the year. The market values at the beginning and end of the year were $216,300 and $174,100, respectively. The net income for Year 2 was $168,600, and no dividends were paid during the year. The Stockholders' Equity section of the balance sheet was as follows on December 31, Year 1: Copernicus CorporationStockholders' EquityDecember 31, Year 1 Common stock $38,000 Paid-in capital in excess of par 290,000 Retained earnings 381,300 Unrealized gain on available-for-sale investments 33,000 Total stockholders’ equity $742,300 Prepare the Stockholders' Equity section of the balance sheet for December 31, Year 2.arrow_forwardThe following information was taken from the financial statement of Fox Resources for December 31 of the current fiscal year: Common stock, $20 par value (no change during the year) $5,000,000 Preferred 10% stock, $40 par (no change during the year) 2,000,000 The net income was $600,000, and the declared dividends on the common stock were $125,000 for the current year. The market price of the common stock is $20 per share. Calculate for the common stock: i cant figure out earnings per share, price-earnings ratio, dividends per share or dividend yieldarrow_forward
- The net income of a company for the year was $570,000. The company has no preferred stock. Common stockholders' equity was $1,700,000 at the beginning of the year and $2,300,000 at the end of the year. Calculate the rate of return on common stockholders' equity. (Round your answer to two decimal places.) A 33.53% B 28.50% C 24.78% D 19.86%arrow_forwardThe following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $10 par value (no change during the year) $3,100,000 Preferred $10 stock, $100 par (no change during the year) $4,000,000 The net income was $1,206,000 and the declared dividends on the common stock were $77,500 for the current year. The market price of the common stock is $20.80 per share. For the common stock, determine (d) the dividend yieldarrow_forwardThe following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year:Common stock, $20 par (no change during the year) $10,000,000Preferred $4 stock, $40 par (no change during the year) 2,500,000The net income was $1,750,000, and the declared dividends on the common stock were $1,125,000 for the current year. The market price of the common stock is $45 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. Round ratios and percentages to one decimal place, except for per-share amounts.arrow_forward
- Gusion Corporation has provided the following financial data (in thousands of dollars): Total assets.. Stockholders' equity: Preferred stock, P100 par value, 5%.. Common stock, P2 par value. Additional paid-in capital-common stock Retained earnings....... Year 2 P1,520 P200 P400 P160 P380 Year 1 P1,490 P200 P400 P160 P320 Net income for Year 2 was P110 thousand. Interest expense was P21 thousand. The tax rate was 30%. Dividends on common stock during Year 2 totaled P40 thousand. Dividends on preferred stock totaled P10 thousand. The market price of common stock at the end of Year 2 was P9.15 per share. What is the dividend yield ratio?arrow_forwardam.104.arrow_forwardMarkus Company's common stock sold for $5.25 per share at the end of this year. The company paid a common stock dividend of $0.63 per share this year. It also provided the following data excerpts from this year's financial statements: Cash Accounts receivable Inventory Current assets Total assets Current liabilities Total liabilities Common stock, $1 par value Total stockholders' equity Total liabilities and stockholders' equity Sales (all on account) Cost of goods sold Gross margin Net operating income Interest expense Net income This Year $ 1,095,000 $ 635,100 $ 459,900 $ 313,875 $ 15,500 $ 208,862 Accounts receivable turnover Average collection period Answer is complete but not entirely correct. 13.62 26.76 days Ending Balance $ 49,000 $ 92,000 $ 76,300 $ 217,300 $ 801,000 $ 85,500 $ 206,000 $ 165,000 $ 595,000 $ 801,000 Beginning Balance $ 44,200 $ 68,700 $ 92,000 $ 204,900 $ 875,400 Foundational 14-9 (Algo) 9. What is the accounts receivable turnover and the average collection…arrow_forward
- The following information was taken from the financial statements of Zeil Inc. for December 31 of the current fiscal year: Common stock, $15 par value (no change during the year) $2,700,000 Preferred $4 stock, $100 par (no change during the year) 2,000,000 The net income was $656,000 and the declared dividends on the common stock were $45,000 for the current year. The market price of the common stock is $24.00 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places. a. Earnings per Share $fill in the blank 1 b. Price-Earnings Ratio fill in the blank 2 c. Dividends per Share $fill in the blank 3 d. Dividend Yield fill in the blank 4arrow_forwardShares purchased one year ago for $8790 are now worth $15,390. During the year, the shares paid dividends totalling $280. Calculate the shares’: (Do not round intermediate calculations and round your final answer to 2 decimal places.) a. Income yield b. Capital gain yield c. Rate of total returnarrow_forwardOn the balance sheet of Bearcat Inc., you notice "Common Stock ($0.10 par)" of $248,655, "Capital Surplus" of $282,621, and "Retained Earnings" of $210,534. If Bearcat Inc. has Sales of $292,6836 and a profit margin of 30.52%, what is the price/earnings (P/E) ratio of the firm if their stock is currently selling for $21.94 per share? O None of these options are correct 67.18 54.97 240.97 61.07 DISCLarrow_forward
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