The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Question not attempted.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Retained earnings, January 1
$3,712,000.00
$3,262,000.00
3
Net income
591,000.00
560,000.00
4
Total
$4,303,000.00
$3,822,000.00
5
Dividends:
6
On preferred stock
$10,000.00
$10,000.00
7
On common stock
100,000.00
100,000.00
8
Total dividends
$110,000.00
$110,000.00
9
Retained earnings, December 31
$4,193,000.00
$3,712,000.00
Question not attempted.
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Sales
$10,840,000.00
$10,000,000.00
3
Cost of goods sold
6,000,000.00
5,440,000.00
4
Gross profit
$4,840,000.00
$4,560,000.00
5
Selling expenses
$2,160,000.00
$2,000,000.00
6
Administrative expenses
1,627,500.00
1,500,000.00
7
Total operating expenses
$3,787,500.00
$3,500,000.00
8
Income from operations
$1,052,500.00
$1,060,000.00
9
Other income
99,500.00
20,000.00
10
$1,152,000.00
$1,080,000.00
11
Other expense (interest)
131,000.00
120,000.00
12
Income before income tax
$1,021,000.00
$960,000.00
13
Income tax expense
430,000.00
400,000.00
14
Net income
$591,000.00
$560,000.00
Question not attempted.
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
1
20Y2
20Y1
2
Assets
3
Current assets:
4
Cash
$1,050,000.00
$950,000.00
5
Marketable securities
301,000.00
420,000.00
6
Accounts receivable (net)
584,000.00
500,000.00
7
Inventories
410,000.00
380,000.00
8
Prepaid expenses
107,000.00
20,000.00
9
Total current assets
$2,452,000.00
$2,270,000.00
10
Long-term investments
800,000.00
800,000.00
11
Property, plant, and equipment (net)
5,750,000.00
5,184,000.00
12
Total assets
$9,002,000.00
$8,254,000.00
13
Liabilities
14
Current liabilities
$859,000.00
$792,000.00
15
Long-term liabilities:
16
Mortgage note payable, 6%,
$200,000.00
$0.00
17
Bonds payable, 4%,
3,000,000.00
3,000,000.00
18
Total long-term liabilities
$3,200,000.00
$3,000,000.00
19
Total liabilities
$4,059,000.00
$3,792,000.00
20
Stockholdersâ Equity
21
Preferred 4% stock, $5 par
$250,000.00
$250,000.00
22
Common stock, $5 par
500,000.00
500,000.00
23
Retained earnings
4,193,000.00
3,712,000.00
24
Total stockholdersâ equity
$4,943,000.00
$4,462,000.00
25
Total liabilities and stockholdersâ equity
$9,002,000.00
$8,254,000.00
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): Assume a 365-day year.
1. Working Capital____
2. Current Ratio_____
3. Quick Ratio______
4. Accounts receivable turnover_____
5. Number of days' sales in receivalbes-_____
6. Inventory turnover_________
7. Number of days' sales in Inventory_________
8. Ratio of fixed assets to long-term liabilities_____
9. Ratio of liabilities to stockholders' equity_____
10> Time interest earned________
11. Asset turnover________
12. Return on total assets___________
13. Return on stockholders' equity_____
14. Return on common stockholders' equity_______
15. Earnings per share on common stock__________
16. Price-earnings ratio______
17. Dividends per share of common stock________
18. Dividend Yield___________
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Question not attempted.
| Marshall Inc. |
| Comparative Retained Earnings Statement |
| For the Years Ended December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Retained earnings, January 1 | $3,712,000.00 | $3,262,000.00 |
| 3 | Net income | 591,000.00 | 560,000.00 |
| 4 | Total | $4,303,000.00 | $3,822,000.00 |
| 5 | Dividends: | ||
| 6 | On preferred stock | $10,000.00 | $10,000.00 |
| 7 | On common stock | 100,000.00 | 100,000.00 |
| 8 | Total dividends | $110,000.00 | $110,000.00 |
| 9 | Retained earnings, December 31 | $4,193,000.00 | $3,712,000.00 |
Question not attempted.
| Marshall Inc. |
| Comparative Income Statement |
| For the Years Ended December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Sales | $10,840,000.00 | $10,000,000.00 |
| 3 | Cost of goods sold | 6,000,000.00 | 5,440,000.00 |
| 4 | Gross profit | $4,840,000.00 | $4,560,000.00 |
| 5 | Selling expenses | $2,160,000.00 | $2,000,000.00 |
| 6 | Administrative expenses | 1,627,500.00 | 1,500,000.00 |
| 7 | Total operating expenses | $3,787,500.00 | $3,500,000.00 |
| 8 | Income from operations | $1,052,500.00 | $1,060,000.00 |
| 9 | Other income | 99,500.00 | 20,000.00 |
| 10 | $1,152,000.00 | $1,080,000.00 | |
| 11 | Other expense (interest) | 131,000.00 | 120,000.00 |
| 12 | Income before income tax | $1,021,000.00 | $960,000.00 |
| 13 | Income tax expense | 430,000.00 | 400,000.00 |
| 14 | Net income | $591,000.00 | $560,000.00 |
Question not attempted.
| Marshall Inc. |
| Comparative Balance Sheet |
| December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Assets | ||
| 3 | Current assets: | ||
| 4 | Cash | $1,050,000.00 | $950,000.00 |
| 5 | Marketable securities | 301,000.00 | 420,000.00 |
| 6 | Accounts receivable (net) | 584,000.00 | 500,000.00 |
| 7 | Inventories | 410,000.00 | 380,000.00 |
| 8 | Prepaid expenses | 107,000.00 | 20,000.00 |
| 9 | Total current assets | $2,452,000.00 | $2,270,000.00 |
| 10 | Long-term investments | 800,000.00 | 800,000.00 |
| 11 | Property, plant, and equipment (net) | 5,750,000.00 | 5,184,000.00 |
| 12 | Total assets | $9,002,000.00 | $8,254,000.00 |
| 13 | Liabilities | ||
| 14 | Current liabilities | $859,000.00 | $792,000.00 |
| 15 | Long-term liabilities: | ||
| 16 | Mortgage note payable, 6%, | $200,000.00 | $0.00 |
| 17 | Bonds payable, 4%, | 3,000,000.00 | 3,000,000.00 |
| 18 | Total long-term liabilities | $3,200,000.00 | $3,000,000.00 |
| 19 | Total liabilities | $4,059,000.00 | $3,792,000.00 |
| 20 | Stockholdersâ Equity | ||
| 21 | Preferred 4% stock, $5 par | $250,000.00 | $250,000.00 |
| 22 | Common stock, $5 par | 500,000.00 | 500,000.00 |
| 23 | Retained earnings | 4,193,000.00 | 3,712,000.00 |
| 24 | Total stockholdersâ equity | $4,943,000.00 | $4,462,000.00 |
| 25 | Total liabilities and stockholdersâ equity | $9,002,000.00 | $8,254,000.00 |
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): Assume a 365-day year.
1. Working Capital____
2. Current Ratio_____
3. Quick Ratio______
4. Accounts receivable turnover_____
5. Number of days' sales in receivalbes-_____
6. Inventory turnover_________
7. Number of days' sales in Inventory_________
8. Ratio of fixed assets to long-term liabilities_____
9. Ratio of liabilities to stockholders' equity_____
10> Time interest earned________
11. Asset turnover________
12. Return on total assets___________
13. Return on stockholders' equity_____
14. Return on common stockholders' equity_______
15. Earnings per share on common stock__________
16. Price-earnings ratio______
17. Dividends per share of common stock________
18. Dividend Yield___________
Related questions
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
| Marshall Inc. |
| Comparative Retained Earnings Statement |
| For the Years Ended December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Retained earnings, January 1 | $3,704,000.00 | $3,264,000.00 |
| 3 | Net income | 600,000.00 | 550,000.00 |
| 4 | Total | $4,304,000.00 | $3,814,000.00 |
| 5 | Dividends: | ||
| 6 | On preferred stock | $10,000.00 | $10,000.00 |
| 7 | On common stock | 100,000.00 | 100,000.00 |
| 8 | Total dividends | $110,000.00 | $110,000.00 |
| 9 | Retained earnings, December 31 | $4,194,000.00 | $3,704,000.00 |
| Marshall Inc. |
| Comparative Income Statement |
| For the Years Ended December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Sales | $10,850,000.00 | $10,000,000.00 |
| 3 | Cost of goods sold | 6,000,000.00 | 5,450,000.00 |
| 4 | Gross profit | $4,850,000.00 | $4,550,000.00 |
| 5 | Selling expenses | $2,170,000.00 | $2,000,000.00 |
| 6 | Administrative expenses | 1,627,500.00 | 1,500,000.00 |
| 7 | Total operating expenses | $3,797,500.00 | $3,500,000.00 |
| 8 | Income from operations | $1,052,500.00 | $1,050,000.00 |
| 9 | Other income | 99,500.00 | 20,000.00 |
| 10 | $1,152,000.00 | $1,070,000.00 | |
| 11 | Other expense (interest) | 132,000.00 | 120,000.00 |
| 12 | Income before income tax | $1,020,000.00 | $950,000.00 |
| 13 | Income tax expense | 420,000.00 | 400,000.00 |
| 14 | Net income | $600,000.00 | $550,000.00 |
| Marshall Inc. |
| Comparative Balance Sheet |
| December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Assets | ||
| 3 | Current assets: | ||
| 4 | Cash | $1,050,000.00 | $950,000.00 |
| 5 | Marketable securities | 301,000.00 | 420,000.00 |
| 6 | Accounts receivable (net) | 585,000.00 | 500,000.00 |
| 7 | Inventories | 420,000.00 | 380,000.00 |
| 8 | Prepaid expenses | 108,000.00 | 20,000.00 |
| 9 | Total current assets | $2,464,000.00 | $2,270,000.00 |
| 10 | Long-term investments | 800,000.00 | 800,000.00 |
| 11 | Property, plant, and equipment (net) | 5,760,000.00 | 5,184,000.00 |
| 12 | Total assets | $9,024,000.00 | $8,254,000.00 |
| 13 | Liabilities | ||
| 14 | Current liabilities | $880,000.00 | $800,000.00 |
| 15 | Long-term liabilities: | ||
| 16 | Mortgage note payable, 6%, | $200,000.00 | $0.00 |
| 17 | Bonds payable, 4%, | 3,000,000.00 | 3,000,000.00 |
| 18 | Total long-term liabilities | $3,200,000.00 | $3,000,000.00 |
| 19 | Total liabilities | $4,080,000.00 | $3,800,000.00 |
| 20 | Stockholdersâ Equity | ||
| 21 | Preferred 4% stock, $5 par | $250,000.00 | $250,000.00 |
| 22 | Common stock, $5 par | 500,000.00 | 500,000.00 |
| 23 | Retained earnings | 4,194,000.00 | 3,704,000.00 |
| 24 | Total stockholdersâ equity | $4,944,000.00 | $4,454,000.00 |
| 25 | Total liabilities and stockholdersâ equity | $9,024,000.00 | $8,254,000.00 |
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):
| 1. | Working capital |
| 2. | Current ratio |
| 3. | Quick ratio |
| 4. | Accounts receivable turnover |
| 5. | Number of daysâ sales in receivables |
| 6. | Inventory turnover |
| 7. | Number of daysâ sales in inventory |
| 8. | Ratio of fixed assets to long-term liabilities |
| 9. | Ratio of liabilities to stockholdersâ equity |
| 10. | Times interest earned |
| 11. | Asset turnover |
| 12. | Return on total assets |
| 13. | Return on stockholdersâ equity |
| 14. | Return on common stockholdersâ equity |
| 15. | Earnings per share on common stock |
| 16. | Price-earnings ratio |
| 17. | Dividends per share of common stock |
| 18. | Dividend yield |
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):
| 1. Working Capital | $ |
| 2. Current ratio | |
| 3. Quick ratio | |
| 4. Accounts receivable turnover | |
| 5. Number of days' sales in receivables | |
| 6. Inventory turnover | |
| 7. Number of daysâ sales in inventory | |
| 8. Ratio of fixed assets to long-term liabilities | |
| 9. Ratio of liabilities to stockholdersâ equity | |
| 10. Times interest earned | |
| 11. Asset turnover | |
| 12. Return on total assets | % |
| 13. Return on stockholdersâ equity | % |
| 14. Return on common stockholdersâ equity | % |
| 15. Earnings per share on common stock | $ |
| 16. Price-earnings ratio | |
| 17. Dividends per share of common stock | $ |
| 18. Dividend yield | % |
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
| Marshall Inc. |
| Comparative Retained Earnings Statement |
| For the Years Ended December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Retained earnings, January 1 | $3,704,000.00 | $3,264,000.00 |
| 3 | Net income | 600,000.00 | 550,000.00 |
| 4 | Total | $4,304,000.00 | $3,814,000.00 |
| 5 | Dividends: | ||
| 6 | On preferred stock | $10,000.00 | $10,000.00 |
| 7 | On common stock | 100,000.00 | 100,000.00 |
| 8 | Total dividends | $110,000.00 | $110,000.00 |
| 9 | Retained earnings, December 31 | $4,194,000.00 | $3,704,000.00 |
| Marshall Inc. |
| Comparative Income Statement |
| For the Years Ended December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Sales | $10,850,000.00 | $10,000,000.00 |
| 3 | Cost of goods sold | 6,000,000.00 | 5,450,000.00 |
| 4 | Gross profit | $4,850,000.00 | $4,550,000.00 |
| 5 | Selling expenses | $2,170,000.00 | $2,000,000.00 |
| 6 | Administrative expenses | 1,627,500.00 | 1,500,000.00 |
| 7 | Total operating expenses | $3,797,500.00 | $3,500,000.00 |
| 8 | Income from operations | $1,052,500.00 | $1,050,000.00 |
| 9 | Other income | 99,500.00 | 20,000.00 |
| 10 | $1,152,000.00 | $1,070,000.00 | |
| 11 | Other expense (interest) | 132,000.00 | 120,000.00 |
| 12 | Income before income tax | $1,020,000.00 | $950,000.00 |
| 13 | Income tax expense | 420,000.00 | 400,000.00 |
| 14 | Net income | $600,000.00 | $550,000.00 |
| Marshall Inc. |
| Comparative Balance Sheet |
| December 31, 20Y2 and 20Y1 |
| 1 | 20Y2 | 20Y1 | |
| 2 | Assets | ||
| 3 | Current assets: | ||
| 4 | Cash | $1,050,000.00 | $950,000.00 |
| 5 | Marketable securities | 301,000.00 | 420,000.00 |
| 6 | Accounts receivable (net) | 585,000.00 | 500,000.00 |
| 7 | Inventories | 420,000.00 | 380,000.00 |
| 8 | Prepaid expenses | 108,000.00 | 20,000.00 |
| 9 | Total current assets | $2,464,000.00 | $2,270,000.00 |
| 10 | Long-term investments | 800,000.00 | 800,000.00 |
| 11 | Property, plant, and equipment (net) | 5,760,000.00 | 5,184,000.00 |
| 12 | Total assets | $9,024,000.00 | $8,254,000.00 |
| 13 | Liabilities | ||
| 14 | Current liabilities | $880,000.00 | $800,000.00 |
| 15 | Long-term liabilities: | ||
| 16 | Mortgage note payable, 6%, | $200,000.00 | $0.00 |
| 17 | Bonds payable, 4%, | 3,000,000.00 | 3,000,000.00 |
| 18 | Total long-term liabilities | $3,200,000.00 | $3,000,000.00 |
| 19 | Total liabilities | $4,080,000.00 | $3,800,000.00 |
| 20 | Stockholdersâ Equity | ||
| 21 | Preferred 4% stock, $5 par | $250,000.00 | $250,000.00 |
| 22 | Common stock, $5 par | 500,000.00 | 500,000.00 |
| 23 | Retained earnings | 4,194,000.00 | 3,704,000.00 |
| 24 | Total stockholdersâ equity | $4,944,000.00 | $4,454,000.00 |
| 25 | Total liabilities and stockholdersâ equity | $9,024,000.00 | $8,254,000.00 |
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):
| 1. | Working capital |
| 2. | Current ratio |
| 3. | Quick ratio |
| 4. | Accounts receivable turnover |
| 5. | Number of daysâ sales in receivables |
| 6. | Inventory turnover |
| 7. | Number of daysâ sales in inventory |
| 8. | Ratio of fixed assets to long-term liabilities |
| 9. | Ratio of liabilities to stockholdersâ equity |
| 10. | Times interest earned |
| 11. | Asset turnover |
| 12. | Return on total assets |
| 13. | Return on stockholdersâ equity |
| 14. | Return on common stockholdersâ equity |
| 15. | Earnings per share on common stock |
| 16. | Price-earnings ratio |
| 17. | Dividends per share of common stock |
| 18. | Dividend yield |
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):
| 1. Working Capital | $ |
| 2. Current ratio | |
| 3. Quick ratio | |
| 4. Accounts receivable turnover | |
| 5. Number of days' sales in receivables | |
| 6. Inventory turnover | |
| 7. Number of daysâ sales in inventory | |
| 8. Ratio of fixed assets to long-term liabilities | |
| 9. Ratio of liabilities to stockholdersâ equity | |
| 10. Times interest earned | |
| 11. Asset turnover | |
| 12. Return on total assets | % |
| 13. Return on stockholdersâ equity | % |
| 14. Return on common stockholdersâ equity | % |
| 15. Earnings per share on common stock | $ |
| 16. Price-earnings ratio | |
| 17. Dividends per share of common stock | $ |
| 18. Dividend yield | % |
Points:
12 / 18
Measures of liquidity, Solvency and Profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall Inc. common stock was $ 56 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 | $ 1,942,900 | $ 1,649,000 | ||||
| Net income | 438,000 | 337,700 | ||||
| Total | $ 2,293,300 | $ 1,986,700 | ||||
| Dividends | ||||||
| On preferred stock | $ 7,000 | $ 7,000 | ||||
| On common stock | 36,800 | 36,800 | ||||
| Total dividends | $ 43,800 | $ 43,800 | ||||
| Retained earnings, December 31 | $ 2,337,100 | $ 1,942,900 | ||||
| Marshall Inc. | ||||
| Comparative Income Statement | ||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||
| 20Y2 | 20Y1 | |||
| Sales | $ 2,609,750 | $ 2,404,520 | ||
| Cost of goods sold | 899,360 | 827,410 | ||
| Gross profit | $ 1,710,390 | $ 1,577,110 | ||
| Selling expenses | $ 578,010 | $ 708,850 | ||
| Administrative expenses | 492,370 | 416,310 | ||
| Total operating expenses | 1,070,380 | 1,125,160 | ||
| Income from operations | $ 640,010 | $ 451,950 | ||
| Other income | 33,690 | 28,850 | ||
| $ 673,700 | $ 480,800 | |||
| Other expense (interest) | 176,000 | 96,800 | ||
| Income before income tax | $ 497,700 | $ 384,000 | ||
| Income tax expense | 59,700 | 46,300 | ||
| Net income | $ 438,000 | $ 337,700 | ||
| Marshall Inc. | |||||||
| Comparative Balance Sheet | |||||||
| December 31, 20Y2 and 20Y1 | |||||||
| Dec. 31, 20Y2 | Dec. 31, 20Y1 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash | $ 536,140 | $ 416,030 | |||||
| Marketable securities | 811,450 | 689,410 | |||||
| Accounts receivable (net) | 489,100 | 459,900 | |||||
| Inventories | 365,000 | 277,400 | |||||
| Prepaid expenses | 101,436 | 83,210 | |||||
| Total current assets | $ 2,303,126 | $ 1,925,950 | |||||
| Long-term investments | 1,131,364 | 395,490 | |||||
| Property, plant, and equipment (net) | 2,640,000 | 2,376,000 | |||||
| Total assets | $ 6,074,490 | $ 4,697,440 | |||||
| Liabilities | |||||||
| Current liabilities | $ 677,390 | $ 684,540 | |||||
| Long-term liabilities | |||||||
| Mortgage note payable, 8 % | $ 990,000 | $ 0 | |||||
| Bonds payable, 8 % | 1,210,000 | 1,210,000 | |||||
| Total long-term liabilities | $ 2,200,000 | $ 1,210,000 | |||||
| Total liabilities | $ 2,877,390 | $ 1,894,540 | |||||
| Stockholders' Equity | |||||||
| Preferred $ 0.70 stock, $ 40 par | $ 400,000 | $ 400,000 | |||||
| Common stock, $ 10 par | 460,000 | 460,000 | |||||
| Retained earnings | 2,337,100 | 1,942,900 | |||||
| Total stockholders' equity | $ 3,197,100 | $ 2,802,900 | |||||
| Total liabilities and stockholders' equity | $ 6,074,490 | $ 4,697,440 | |||||
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.
| 1. Working capital | $ | |
| 2. Current ratio | ||
| 3. Quick ratio | ||
| 4. Accounts receivable turnover | ||
| 5. Number of days' sales in receivables | days | |
| 6. Inventory turnover | ||
| 7. Number of days' sales in inventory | days | |
| 8. Ratio of fixed assets to long-term liabilities | ||
| 9. Ratio of liabilities to stockholders' equity | ||
| 10. Times interest earned | ||
| 11. Asset turnover | ||
| 12. Return on total assets | % | |
| 13. Return on stockholdersâ equity | % | |
| 14. Return on common stockholdersâ equity | % | |
| 15. Earnings per share on common stock | $ | |
| 16. Price-earnings ratio | ||
| 17. Dividends per share of common stock | $ | |
| 18. Dividend yield | % |
