P15-3A - 235,000 220,000 Net income $ 45,000 $ 30,000...

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P15-3A (a) Correct. Condensed balance sheet and income statement data for Kersenbrock Corporation appear below. KERSENBROCK CORPORATION Balance Sheets December 31 2009 2008 2007 Cash $ 25,000 $ 20,000 $ 18,000 Receivables (net) 50,000 45,000 48,000 Other current assets 90,000 95,000 64,000 Investments 75,000 70,000 45,000 Plant and equipment (net) 400,000 370,000 358,000 $640,000 $600,000 $533,000 Current liabilities $ 75,000 $ 80,000 $ 70,000 Long-term debt 80,000 85,000 50,000 Common stock, $10 par 340,000 310,000 300,000 Retained earnings 145,000 125,000 113,000 $640,000 $600,000 $533,000 KERSENBROCK CORPORATION Income Statement For the Year Ended December 31 2009 2008 Sales $740,000 $700,000 Less: Sales returns and allowances 40,000 50,000 Net sales 700,000 650,000 Cost of goods sold 420,000 400,000 Gross profit 280,000 250,000 Operating expenses (including income taxes)
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Unformatted text preview: 235,000 220,000 Net income $ 45,000 $ 30,000 Additional information: 1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively. 2. All dividends were paid in cash. Instructions Compute the following ratios for 2008 and 2009. (Weighted-average-common shares in 2009 were 32,000 and in 2008 were 31,000.) (Round earnings per share to 2 decimal places, e.g. 10.50. Round other answers to 1 decimal place, e.g. 10.5.) 2008 2009 (1) Profit margin 4.6 % 6.4 % (2) Asset turnover 1.1 times 1.1 times (3) Earnings per share $ .97 $ 1.41 (4) Price-earnings 5.2 times 5.7 times (5) Payout 60 % 55.6 % (6) Debt to total assets 27.5 % 24.2 %...
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