EXERCISE 15–2 Financial Ratios for Common Stockholders [LO2] Comparative financial statements for…


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Comparative financial statements for…" amount="25"]

EXERCISE 15–2 Financial Ratios for Common Stockholders [LO2] Comparative financial statements for… 1 answer below » EXERCISE 15–2 Financial Ratios for Common Stockholders [LO2] Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or pre- ferred stock during the year. A total of 600 thousand shares of common stock were outstanding. The interest rate on the bond payable was 14%, the income tax rate was 40%, and the dividend per share of common stock was $0.75. The market value of the company’s common stock at the end of the year was $26. All of the company’s sales are on account. & View complete question » EXERCISE 15–2 Financial Ratios for Common Stockholders [LO2] Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear on the following page. The company did not issue any new common or pre- ferred stock during the year. A total of 600 thousand shares of common stock were outstanding. The interest rate on the bond payable was 14%, the income tax rate was 40%, and the dividend per share of common stock was $0.75. The market value of the company’s common stock at the end of the year was $26. All of the company’s sales are on account. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  1,080 $ 1,210 Accounts receivable, net . . . . . . . . . . . . . . . 9,000 6,500 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 10,600 Prepaid expenses . . . . . . . . . . . . . . . . . . . . 600 500 Total current assets  . . . . . . . . . . . . . . . . . . . . 22,680 18,810 Property and equipment: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 9,000 Buildings and equipment, net . . . . . . . . . . . 36,800 38,000 Total property and equipment . . . . . . . . . . . . . 45,800 47,000 Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . . $68,480 $65,810 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable . . . . . . . . . . . . . . . . . . . . $18,500 $17,400 Accrued payables . . . . . . . . . . . . . . . . . . . . 900 700 Notes payable, short term . . . . . . . . . . . . . . — 100 Total current liabilities . . . . . . . . . . . . . . . . . . . Long-term liabilities: Bonds payable  . . . . . . . . . . . . . . . . . . . . . . 19,400 8,000 18,200 8,000 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 27,400 26,200 Stockholders’ equity: Preferred stock . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000 Common stock . . . . . . . . . . . . . . . . . . . . . . 2,000 2,000 Additional paid-in capital . . . . . . . . . . . . . . . 4,000 4,000 Total paid-in capital . . . . . . . . . . . . . . . . . 7,000 7,000 Retained earnings . . . . . . . . . . . . . . . . . . 34,080 32,610 Total stockholders’ equity . . . . . . . . . . . . . . . . 41,080 39,610 Total liabilities and stockholders’ equity . . . . . $68,480 $65,810 Sales  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $66,000 $64,000 Cost of goods sold . . . . . . . . . . . . . . . . . . . . . 43,000 42,000 Gross margin  . . . . . . . . . . . . . . . . . . . . . . . . . 23,000 22,000 Selling and administrative expenses: Selling expenses  . . . . . . . . . . . . . . . . . . . . 11,500 11,000 Administrative expenses . . . . . . . . . . . . . . . 7,400 7,000 Total selling and administrative expenses . . . . 18,900 18,000 Net operating income . . . . . . . . . . . . . . . . . . . 4,100 4,000 Interest expense . . . . . . . . . . . . . . . . . . . . . . . 800 800 Net income before taxes . . . . . . . . . . . . . . . . . 3,300 3,200 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . 1,320 1,280 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,980 1,920 Dividends to preferred stockholders . . . . . …

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Comparative financial statements for…" amount="25"]