80.2K

Verified Solution

Link Copied!

HI, i can not resolve this problem.

The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data:

	Current Year			Previous Year
Income Statement
Sales Revenue	$	160,000		$	139,000
Cost of Goods Sold		72,000			68,000
Gross Profit		88,000			71,000
Operating Expenses		46,000			41,000
Interest Expense		5,000			5,000
Income before Income Tax Expense		37,000			25,000
Income Tax Expense (30%)		11,100			7,500
Net Income	$	25,900		$	17,500
Balance Sheet
Cash	$	82,550		$	28,000
Accounts Receivable, Net		27,000			22,000
Inventory		35,000			48,000
Property and Equipment, Net		105,000			115,000
Total Assets	$	249,550		$	213,000
Accounts Payable	$	52,000		$	34,000
Income Tax Payable		1,250			1,000
Note Payable (long-term)		50,000			50,000
Total Liabilities		103,250			85,000
Common Stock (par $10)		96,000			96,000
Retained Earnings		50,300			32,000
Total Liabilities and Stockholders Equity	$	249,550		$	213,000

During the current year, cash dividends amounting to $7,600 were declared and paid.

question:

Stockholders' equity totaled $110,000 at the beginning of the previous year. Compute the return on equity (ROE) ratios for the current and previous years. (Round your answers to 1 decimal place.) Net property and equipment totaled $120,000 at the beginning of the previous year. Compute the fixed asset turnover ratios for the current and previous years. (Round your answers to 2 decimal places.)

Answer & Explanation Solved by verified expert

See Answer