1 - The comparative financial statements of IElliptical...

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Unformatted text preview: The comparative financial statements of IElliptical Solutions Inc. are as follows. The market price of IEllptical Solutions Inc. common stock was $00.00 on December 31, 2010. Optleel Solutlons Ine. Comparative Retalned Eemlnne Statement For the ‘l’eere Ended December 31. 21.110 and 2009 2010 2009 Retained earnings, jannar}:r 1 $ 604,000 $306,000 Add net income for year 423,000 314,000 Total $1,032,000 $620,000 Deduct dividends: On preferred stock $ 4,000 $ 4,000 On common stock 12,000 12,000 Total $ 16,000 $ 16,000 Retained earnings, December 31 $1,016,000 $604,000 Optleel Solutlons Ine. Comporlttue Inoeme Statement For the 1I"elrl Ended December 31. 2010 and 2009 2010 2009 Sales $1,603,000 $1,431 ,600 Sales returns and allowances 5,920 6,000 Net sales $1,602,030 $1,425,600 Cost of goods sold 430,200 499,200 Gross profit $1,121,330 $ 926,400 Selling expenses $ 324,000 $ 352,000 Administrative expenses 234,000 21 1,200 Total operating expenses $ 553,000 $ 563,200 Income ti'om operations $ 563,330 $ 413,200 Other income 24,000 19,200 $ 532,330 $ 432,400 Other expense [interest] 110,220 30,000 Income before income tax $ 422,160 $ 352,400 Income tax expense 49,160 33,400 Netincome $ 423,000 $ 314,000 Assets Current assets: Cash Temperary investments Acceunts receivable {net} Inventeries Prepaid expenses Tetal current assets Lung-term investments Prpperty, plant, and equipment [net]. Tetal assets. liabilities Current liabilities Lung-term liabilities: Mertgage nete payable, 8%, due E015 Bends payable, “HIE-E, clue 21319 Tetal lung-term liabilities Tetal liabilities. Stuekhultlars’ Equity Preferred $2.111] steclt, $51] par Cemmen stpclc, $5 par Retained earnings Tetal steclthelders’ equity Tetal liabilities and steckhelders’ equity. Dec. 31, 2010 $ 240,000 004,000 200,000 200,000 44,000 $1,1 10,000 204,000 1,53 9,200 $2,Efifl,flfl~fl $ 200,000 $ 304,000 000,000 $1,104,000 $1,044,000 $ 100,000 200,000 1,111 15,1300 $1,010,000 $2,000,000 Dec. 31, EDIE $ 102,400 020,000 211,200 00,400 20,200 $ 202,000 200,000 9?E,l}l}l} $2,024,0'Dfl' $ 32fl,l}l}l} $ 000,000 $ 000,000 $1,120,000 0 100,000 200,000 Efld,l}l}l} $ 004,000 $2,024,000 Instructions Determine the following measures for 2010', rounding to one decimal place: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of davs’ sales in receivables fi. Inventory turnover T. Number of davs’ sales in inventor},P 8. Ratio of fixed assets to long—term liabilitjes 9. Ratio of liabiliiies to stockholders’ equity 10. Number of times interest charges earned 11. Number of times preferred dividends earned 1?. Ratio of net sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders’ equity.r 15. Rate earned on common stockholders’ equity 1E. Earnings per share on common stock 1?. Priceearnings ratio 13. Dividends per share of common stock 19. Dividend vield ...
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