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Chap 16 Practice answers - Lesmerises Corporation's most...

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Lesmerises Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled \$40 thousand. Dividends on preferred stock totaled \$10 thousand. The market price of common stock at the end of Year 2 was \$2.85 per share.

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Garrison - Chapter 016 12. The gross margin percentage for Year 2 is closest to: A. 53.4% B. 671.4% C. 34.8% D. 14.9% Gross margin percentage = Gross margin Sales = \$470 \$1,350 = 34.8% 13. The earnings per share of common stock for Year 2 is closest to: Earnings per share = (Net income - Preferred dividends) Average number of common shares outstanding = (\$70 - \$10) 200* = \$60 200* = \$0.30 * Number of common shares outstanding = Common stock Par value per share = \$200 \$1 = 200 shares outstanding (this is the average number of shares outstanding throughout the year given that the common stock account balance is the same on both dates)
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