FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:### Question Prompt:
Complete this question by entering your answers in the tabs below.
**Req A1** | **Req A2** | **Req A3** | **Req B to E**
---
#### b. What is the company’s average income tax rate?
**Note:** Round your final answer to the nearest whole percentage.
#### c. What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.
**Note:** Round your final answer to the nearest whole percentage.
#### d. What is the par value per share of common stock?
**Note:** Round your final answer to the nearest whole Dollars.
#### e. What is the company’s dividend policy (i.e., what proportion of the company’s earnings is used for dividends)?
**Note:** Round your final answer to the nearest whole percentage.
---
### Input Fields:
b. Average income tax rate _______________ %
c. Interest rate _____________ %
d. Par value per share ______________ $
e. Dividend _______________ %
---
### Tabs for Navigation:
- **< Req A3**
- **Req B to E >**
---
**Explanation of Input Fields:**
- **b. Average income tax rate:** Input field where the user can enter the percentage value representing the company's average income tax rate. Users are instructed to round the percentage to the nearest whole number.
- **c. Interest rate:** Input field where the user can enter the interest rate charged on long-term debt. The users are advised to assume that the year-end balance of long-term debt represents the average balance throughout the year and round the value to the nearest whole percentage.
- **d. Par value per share:** Input field where the user can enter the dollar value representing the par value per share of common stock. Users are to round this value to the nearest whole dollar.
- **e. Dividend:** Input field where the user can enter the percentage representing the company's dividend policy, indicating what proportion of the company’s earnings is utilized for dividends. This value should be rounded to the nearest whole number.
### Graphs/Diagrams:
There are no graphs or diagrams present in the image. The content consists of textual questions, notes, and input fields for user responses.
Transcribed Image Text:## Financial Analysis of Breanna Incorporated
### Financial Information (as of December 31, 2022)
The following financial data was obtained from the records of Breanna Incorporated:
- **Accounts receivable**: $10,120
- **Accumulated depreciation**: $50,800
- **Cost of goods sold**: $128,800
- **Income tax expense**: $9,500
- **Cash**: $64,500
- **Net sales**: $191,000
- **Equipment**: $123,000
- **Selling, general, and administrative expenses**: $36,000
- **Common stock (8,200 shares)**: $98,000
- **Accounts payable**: $12,500
- **Retained earnings, 1/1/22**: $32,500
- **Interest expense**: $5,200
- **Merchandise inventory**: $38,200
- **Long-term debt**: $36,200
- **Dividends declared and paid during 2022**: $6,150
> Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year ended December 31, 2022. There were no changes in paid-in capital during the year.
### Required Tasks:
#### a. Prepare Financial Statements:
1. **Income Statement**: Outline the revenues, expenses, and resulting net income for the year ended December 31, 2022.
2. **Statement of Changes in Stockholders' Equity**: Detail the changes in stockholders' equity throughout the year ended December 31, 2022.
3. **Balance Sheet**: Present the company's financial position as of December 31, 2022.
#### b. Calculate Financial Ratios and Metrics:
- **Average Income Tax Rate**: Determine the proportion of income paid as taxes.
- **Interest Rate on Long-term Debt**: Calculate the interest expense as a percentage of the long-term debt.
- **Par Value per Share of Common Stock**: Identify the value assigned per share of common stock.
- **Dividend Policy**: Assess the proportion of earnings used for dividends.
### Instructions for Completion:
To complete this exercise, enter your answers in the tabs provided below. Ensure to prepare a balance sheet dated December
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