Complete this question by entering your answers in the tabs below. Req a1 Req a2 Req b Req c1 Req c2 Calculate the return on equity for the month of January. Choose Numerator -- Return on Equity Ratio Choose Denominator יי +++ < Req a1 = Return on Equity Ratio = II Return on equity Req a2 > 0
On January 1, 2024, the general ledger of Grand Finale Fireworks includes the following account balances:
| Accounts | Debit | Credit |
|---|---|---|
| Cash | $ 44,400 | |
| Accounts Receivable | 47,900 | |
| Supplies | 9,200 | |
| Equipment | 81,000 | |
| Accumulated Depreciation | $10,700 | |
| Accounts Payable | 16,300 | |
| Common Stock, $1 par value | 17,000 | |
| Additional Paid-in Capital | 97,000 | |
| 41,500 | ||
| Totals | $182,500 | $182,500 |
During January 2024, the following transactions occur:
| January 2 | Issue an additional 2,100 shares of $1 par value common stock for $42,000. |
|---|---|
| January 9 | Provide services to customers on account, $19,300. |
| January 10 | Purchase additional supplies on account, $6,600. |
| January 12 | Purchase 1,200 shares of |
| January 15 | Pay cash on accounts payable, $18,200. |
| January 21 | Provide services to customers for cash, $50,800. |
| January 22 | Receive cash on accounts receivable, $18,300. |
| January 29 | Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 17,000 shares outstanding on January 1, 2024, and dividends are not paid on treasury stock.) |
| January 30 | Resell 500 shares of treasury stock for $22 per share. |
| January 31 | Pay cash for salaries during January, $43,700. |
7. Analyze the following for Grand Finale Fireworks:
a-1. Calculate the return on equity for the month of January.
a-2. If the average return on equity for the industry for January is 2.6%, is the company more or less profitable than other companies in the same industry?
b. How many shares of common stock are outstanding as of January 31, 2024?
c-1. Calculate earnings per share for the month of January. (Hint: To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2.)
c-2. If earnings per share was $2.40 last year (i.e., an average of $2.40 per month), is earnings per share for January 2024 better or worse than last year’s average?
Step by step
Solved in 2 steps
