211) The company’s return on equity for Year 2 is closest to:
A) 67.25%
B) 2.27%
C) 1.47%
D) 4.19%
Garrott Corporation’s total assets were $1,505,000 at the end of Year 2 and $1,520,000 at the end
of Year 1. Its total stockholders’ equity was $1,197,000 at the end of Year 2 and $1,180,000 at the
end of Year 1.
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account)
$
1,340,000
Cost of goods sold
830,000
Gross margin
510,000
Operating expenses
465,143
Net operating income
44,857
Interest expense
9,000
Net income before taxes
35,857
Income taxes (30%)
10,757
Net income
$
25,100
212) The company’s net profit margin percentage for Year 2 is closest to:
A) 1.9%
B) 2.7%
C) 3.3%
D) 38.1%
213) The company’s gross margin percentage for Year 2 is closest to:
A) 4.9%
B) 61.4%
C) 38.1%
D) 2031.9%
214) The company’s return on total assets for Year 2 is closest to:
A) 2.09%
B) 2.08%
C) 1.67%
D) 1.66%
215) The company’s return on equity for Year 2 is closest to:
A) 3.02%
B) 3.77%
C) 2.11%
D) 79.14%
165
Kearin Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$
33,000
$
100,000
Accounts receivable, net
281,000
250,000
Inventory
122,000
130,000
Prepaid expenses
68,000
80,000
Total current assets
504,000
560,000
Plant and equipment, net
1,016,000
980,000
Total assets
$
1,520,000
$
1,540,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
80,000
$
100,000
Accrued liabilities
31,000
30,000
Notes payable, short term
56,000
70,000
Total current liabilities
167,000
200,000
Bonds payable
260,000
260,000
Total liabilities
427,000
460,000
Stockholders’ equity:
Common stock, $5 par value
500,000
500,000
Additional paid-in capital
70,000
70,000
Retained earnings
523,000
510,000
Total stockholders’ equity
1,093,000
1,080,000
Total liabilities & stockholders’ equity
$
1,520,000
$
1,540,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account)
$
1,300,000
Cost of goods sold
800,000
Gross margin
500,000
Operating expenses
448,692
Net operating income
51,308
Interest expense
19,000
Net income before taxes
32,308
Income taxes (35%)
11,308
Net income
$
21,000
Dividends on common stock during Year 2 totaled $8,000. The market price of common stock at
the end of Year 2 was $2.02 per share.
216) The company’s net profit margin percentage for Year 2 is closest to:
A) 3.9%
B) 38.5%
C) 2.5%
D) 1.6%
217) The company’s gross margin percentage for Year 2 is closest to:
A) 62.5%
B) 4.2%
C) 38.5%
D) 2381.0%
218) The company’s return on total assets for Year 2 is closest to:
A) 1.38%
B) 2.18%
C) 1.37%
D) 2.19%
219) The company’s return on equity for Year 2 is closest to:
A) 71.44%
B) 4.72%
C) 2.97%
D) 1.93%
Doonan Corporation has provided the following financial data from its balance sheet and income
statement:
Year 2
Year 1
Total assets
$
1,489,000
$
1,440,000
Stockholders’ equity:
Common stock, $4 par value
$
360,000
$
360,000
Additional paid-in capital
$
70,000
$
70,000
Retained earnings
$
570,000
$
550,000
Total stockholders’ equity
$
1,000,000
$
980,000
Interest expense
$
15,000
Income taxes (35%)
$
14,162
Net income
$
26,300
The market price of common stock at the end of Year 2 was $4.79 per share.
220) The company’s return on total assets for Year 2 is closest to:
A) 1.77%
B) 2.46%
C) 1.80%
D) 2.42%
221) The company’s return on equity for Year 2 is closest to:
A) 5.60%
B) 4.09%
C) 2.66%
D) 68.28%
222) The company’s earnings per share for Year 2 is closest to:
A) $6.33 per share
B) $0.29 per share
C) $0.45 per share
D) $0.62 per share
223) The company’s price-earnings ratio for Year 2 is closest to:
A) 0.76
B) 10.64
C) 16.52
D) 7.73
172
Settles Corporation has provided the following financial data:
Balance Sheet
December 31, Year 2 and Year 1
Assets
Year 2
Year 1
Current assets:
Cash
$
142,000
$
110,000
Accounts receivable, net
104,000
120,000
Inventory
119,000
120,000
Prepaid expenses
37,000
40,000
Total current assets
402,000
390,000
Plant and equipment, net
717,000
720,000
Total assets
$
1,119,000
$
1,110,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
156,000
$
180,000
Accrued liabilities
84,000
70,000
Notes payable, short term
66,000
60,000
Total current liabilities
306,000
310,000
Bonds payable
250,000
250,000
Total liabilities
556,000
560,000
Stockholders’ equity:
Common stock, $4 par value
240,000
240,000
Additional paid-in capital
90,000
90,000
Retained earnings
233,000
220,000
Total stockholders’ equity
563,000
550,000
Total liabilities & stockholders’ equity
$
1,119,000
$
1,110,000
Income Statement
For the Year Ended December 31, Year 2
Sales (all on account)
$
1,360,000
Cost of goods sold
850,000
Gross margin
510,000
Operating expenses
462,692
Net operating income
47,308
Interest expense
19,000
Net income before taxes
28,308
Income taxes (35%)
9,908
Net income
$
18,400
Dividends on common stock during Year 2 totaled $5,400. The market price of common stock at
the end of Year 2 was $5.89 per share.
224) The company’s return on total assets for Year 2 is closest to:
A) 2.75%
B) 1.64%
C) 1.65%
D) 2.76%
225) The company’s return on equity for Year 2 is closest to:
A) 3.31%
B) 8.50%
C) 5.09%
D) 50.52%
226) The company’s earnings per share for Year 2 is closest to:
A) $0.31 per share
B) $0.47 per share
C) $0.79 per share
D) $3.88 per share
227) The company’s price-earnings ratio for Year 2 is closest to:
A) 19.00
B) 12.53
C) 7.46
D) 1.52
Recher Corporation’s common stock has a par value of $3 per share and has been stable at a total
value of $270,000 on the company’s balance sheet for several years. The total stockholders’ equity
at the end of this year was $1,023,000 and at the beginning of the year was $1,010,000. Net income
for the year was $17,500. Dividends on common stock during the year totaled $4,500. The market
price of common stock at the end of the year was $3.76 per share.
228) The company’s earnings per share is closest to:
A) $7.37 per share
B) $0.45 per share
C) $0.30 per share
D) $0.19 per share
229) The company’s price-earnings ratio is closest to:
A) 19.79
B) 0.51
C) 8.36
D) 12.53
230) The company’s dividend payout ratio is closest to:
A) 1.3%
B) 1.7%
C) 17.1%
D) 26.3%
231) The company’s dividend yield ratio is closest to:
A) 1.7%
B) 17.1%
C) 1.3%
D) 26.3%
232) The company’s book value per share at the end of the year is closest to:
A) $11.37 per share
B) $7.37 per share
C) $0.19 per share
D) $16.81 per share
Sperle Corporation has provided the following data concerning its stockholders’ equity accounts:
Year 2
Year 1
Stockholders’ equity:
Common stock, $5 par value
$
400,000
$
400,000
Additional paid-in capital
60,000
60,000
Retained earnings
654,000
630,000
Total stockholders’ equity
$
1,114,000
$
1,090,000
Net income for Year 2 was $30,400. Dividends on common stock during Year 2 totaled $6,400.
The market price of common stock at the end of Year 2 was $3.08 per share.
233) The company’s earnings per share for Year 2 is closest to:
A) $8.18 per share
B) $0.38 per share
C) $0.54 per share
D) $0.68 per share