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13-358
Income taxes (35%) 14,862
Net income $27,600
Dividends on common stock during Year 2 totaled $5,600. The market price of common stock at
the end of Year 2 was $5.60 per share.
Required:
a. What is the company's net profit margin percentage for Year 2?
b. What is the company's gross margin percentage for Year 2?
c. What is the company's return on total assets for Year 2?
d. What is the company's return on equity for Year 2?
284. Degollado Corporation's most recent income statement appears below:
Sales (all on account) $140,000
Cost of goods sold 60,000
Gross margin 80,000
Selling and administrative expense 30,000
Net operating income 50,000
Interest expense 10,000
Net income before taxes 40,000
Income taxes (30%) 12,000
Net income $28,000
The beginning balance of total assets was $200,000 and the ending balance was $220,000.
Required:
Compute the return on total assets. Show your work!
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285. Marovich Corporation has provided the following financial data:
Year 2 Year 1
Total assets $1,332,000 $1,300,000
Common stock, $4 par value $200,000 $200,000
Total stockholders' equity $1,042,000 $1,010,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account) $1,230,000
Cost of goods sold 810,000
Gross margin 420,000
Operating expenses 355,615
Net operating income 64,385
Interest expense 9,000
Net income before taxes 55,385
Income taxes (35%) 19,385
Net income $36,000
Dividends on common stock during Year 2 totaled $4,000. The market price of common stock at
the end of Year 2 was $6.41 per share.
Required:
a. What is the company's net profit margin percentage for Year 2?
b. What is the company's gross margin percentage for Year 2?
c. What is the company's return on total assets for Year 2?
d. What is the company's return on equity for Year 2?
e. What is the company's earnings per share for Year 2?
f. What is the company's price-earnings ratio for Year 2?
g. What is the company's dividend payout ratio for Year 2?
h. What is the company's dividend yield ratio for Year 2?
i. What is the company's book value per share at the end of Year 2?
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286. Straton Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets Year 2 Year 1
Current assets:
Cash $208,000 $200,000
Accounts receivable 247,000 290,000
Inventory 165,000 180,000
Prepaid expenses 56,000 50,000
Total current assets 676,000 720,000
Plant and equipment, net 1,000,000 920,000
Total assets $1,676,000 $1,640,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $115,000 $120,000
Accrued liabilities 107,000 90,000
Notes payable, short term 68,000 70,000
Total current liabilities 290,000 280,000
Bonds payable 290,000 290,000
Total liabilities 580,000 570,000
Stockholders' equity:
Common stock, $2 par value 140,000 140,000
Additional paid-in capital--common stock 90,000 90,000
Retained earnings 866,000 840,000
Total stockholders' equity 1,096,000 1,070,000
Total liabilities & stockholders' equity $1,676,000 $1,640,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account) $1,320,000
Cost of goods sold 860,000
Gross margin 460,000
Operating expenses 394,769
Net operating income 65,231
Interest expense 22,000
Net income before taxes 43,231
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Income taxes (35%) 15,131
Net income $28,100
Dividends on common stock during Year 2 totaled $2,100. The market price of common stock at
the end of Year 2 was $5.56 per share.
Required:
a. What is the company's net profit margin percentage for Year 2?
b. What is the company's gross margin percentage for Year 2?
c. What is the company's return on total assets for Year 2?
d. What is the company's return on equity for Year 2?
e. What is the company's earnings per share for Year 2?
f. What is the company's price-earnings ratio for Year 2?
g. What is the company's dividend payout ratio for Year 2?
h. What is the company's dividend yield ratio for Year 2?
i. What is the company's book value per share at the end of Year 2?
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287. Moselle Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets Year 2 Year 1
Current assets:
Cash $252,000 $200,000
Accounts receivable 255,000 260,000
Inventory 133,000 120,000
Prepaid expenses 18,000 20,000
Total current assets 658,000 600,000
Plant and equipment, net 681,000 730,000
Total assets $1,339,000 $1,330,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $177,000 $190,000
Accrued liabilities 25,000 30,000
Notes payable, short term 39,000 40,000
Total current liabilities 241,000 260,000
Bonds payable 200,000 200,000
Total liabilities 441,000 460,000
Stockholders' equity:
Common stock, $4 par value 240,000 240,000
Additional paid-in capital--common stock 80,000 80,000
Retained earnings 578,000 550,000
Total stockholders' equity 898,000 870,000
Total liabilities & stockholders' equity $1,339,000 $1,330,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account) $1,400,000
Cost of goods sold 900,000
Gross margin 500,000
Operating expenses 436,462
Net operating income 63,538
Interest expense 14,000
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Net income before taxes 49,538
Income taxes (35%) 17,338
Net income $32,200
Dividends on common stock during Year 2 totaled $4,200. The market price of common stock at
the end of Year 2 was $9.72 per share.
Required:
a. What is the company's earnings per share for Year 2?
b. What is the company's price-earnings ratio for Year 2?
c. What is the company's dividend payout ratio for Year 2?
d. What is the company's dividend yield ratio for Year 2?
e. What is the company's book value per share at the end of Year 2?
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288. Mihok Corporation has provided the following financial data:
Year 2 Year 1
Stockholders' equity:
Common stock, $3 par value $300,000 $300,000
Additional paid-in capital--common stock 100,000 100,000
Retained earnings 375,000 370,000
Total stockholders' equity $775,000 $770,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account) $1,380,000
Cost of goods sold 780,000
Gross margin 600,000
Operating expenses 567,714
Net operating income 32,286
Interest expense 18,000
Net income before taxes 14,286
Income taxes (30%) 4,286
Net income $10,000
Dividends on common stock during Year 2 totaled $5,000. The market price of common stock at
the end of Year 2 was $0.97 per share.
Required:
a. What is the company's earnings per share for Year 2?
b. What is the company's price-earnings ratio for Year 2?
c. What is the company's dividend payout ratio for Year 2?
d. What is the company's dividend yield ratio for Year 2?
e. What is the company's book value per share at the end of Year 2?
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289. Sehrt Corporation has provided the following financial data:
Year 2 Year 1
Common stock, $3 par value $300,000 $300,000
Total stockholders' equity $803,000 $770,000
The company's net income for Year 2 was $44,000. Dividends on common stock during Year 2
totaled $11,000. The market price of common stock at the end of Year 2 was $6.29 per share.
Required:
a. What is the company's earnings per share for Year 2?
b. What is the company's price-earnings ratio for Year 2?
c. What is the company's dividend payout ratio for Year 2?
d. What is the company's dividend yield ratio for Year 2?
e. What is the company's book value per share at the end of Year 2?
