The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall...
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Accounting
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
20Y1
Retained earnings, January 1
$2,554,025
$2,149,775
Net income
568,000
440,300
Dividends:
On preferred stock
(7,700)
(7,700)
On common stock
(28,350)
(28,350)
Retained earnings, December 31
$3,085,975
$2,554,025
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
20Y1
Sales
$3,391,215
$3,124,480
Cost of merchandise sold
1,165,080
1,071,870
Gross profit
$2,226,135
$2,052,610
Selling expenses
$764,270
$929,290
Administrative expenses
651,045
545,780
Total operating expenses
$1,415,315
$1,475,070
Income from operations
$810,820
$577,540
Other revenue and expense:
Other revenue
42,680
36,860
Other expense (interest)
(208,000)
(114,400)
Income before income tax expense
$645,500
$500,000
Income tax expense
77,500
59,700
Net income
$568,000
$440,300
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y2
20Y1
Assets
Current assets:
Cash
$562,580
$557,000
Marketable securities
851,480
923,040
Accounts receivable (net)
613,200
576,700
Inventories
467,200
365,000
Prepaid expenses
106,436
111,400
Total current assets
$2,600,896
$2,533,140
Long-term investments
1,697,859
603,248
Property, plant, and equipment (net)
3,380,000
3,042,000
Total assets
$7,678,755
$6,178,388
Liabilities
Current liabilities
$812,780
$1,014,363
Long-term liabilities:
Mortgage note payable, 8%
$1,170,000
$0
Bonds payable, 8%
1,430,000
1,430,000
Total long-term liabilities
$2,600,000
$1,430,000
Total liabilities
$3,412,780
$2,444,363
Stockholders' Equity
Preferred $0.70 stock, $50 par
$550,000
$550,000
Common stock, $10 par
630,000
630,000
Retained earnings
3,085,975
2,554,025
Total stockholders' equity
$4,265,975
$3,734,025
Total liabilities and stockholders' equity
$7,678,755
$6,178,388
Required:
Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
13. Return on stockholders equity
fill in the blank 13
%
14. Return on common stockholders equity
fill in the blank 14
%
15. Earnings per share on common stock
$fill in the blank 15
16. Price-earnings ratio
fill in the blank 16
17. Dividends per share of common stock
$fill in the blank 17
18. Dividend yield
fill in the blank 18
Answer & Explanation
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