Use this information for Kellman Company to answer the questions that follow. The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $600,000 $560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 125,000 65,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in capital in excess of par—Common stock 75,000 75,000 Retained earnings 310,000 210,000 Using the balance sheets for Kellman Company, if net income is $150,000 and interest expense is $20,000 for Year 2, what is the return on stockholders' equity for Year 2?

Use this information for Kellman Company to answer the questions that follow. The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $600,000 $560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 125,000 65,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in capital in excess of par—Common stock 75,000 75,000 Retained earnings 310,000 210,000 Using the balance sheets for Kellman Company, if net income is $150,000 and interest expense is $20,000 for Year 2, what is the return on stockholders' equity for Year 2?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 19P

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Suppose that you are given the following data for Niles Company : Note: The data and calculations are based on a 365-day year. Cash and equivalents Fixed assets Sales Net income Current liabilities Current ratio DSO ROE $225,000 $650,000 $2,500,000 $112,500 $240,000 2.5 18.25 12.00%
Vertical Analysis of Balance Sheet Balance sheet data for Hanes Company on December 31, the end of the fiscal year, are shown below. 20Y2 20Y1 Current assets 346,560 203,000 Property, plant, and equipment 595,650 527,800 Intangible assets 140,790 81,200 Current liabilities 238,260 129,920 Long-term liabilities 433,200 341,040 Common stock 119,130 113,680 Retained earnings 292,410 227,360 Prepare a comparative balance sheet for 20Y2 and 20Y1, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place. Hanes Company Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent Assets Current assets $346,560 % $203,000 % Property, plant, and equipment 595,650 % 527,800 % Intangible assets 140,790 % 81,200 % Total…
Vertical Analysis of Balance Sheet Balance sheet data for Hanes Company on December 31, the end of the fiscal year, are shown below. Current assets Property, plant, and equipment Intangible assets Current liabilities Long-term liabilities Common stock Retained earnings Current assets 20Y2 Assets 266,240 457,600 108,160 183,040 324,480 91,520 232,960 20Y1 $266,240 162,240 % 418,080 43,680 106,080 Prepare a comparative balance sheet for 20Y2 and 20Y1, stating each asset as a percent of total assets and each liability and stockholders' equity of the total liabilities and stockholders' equity. If required, round percentages to one decimal place. 249,600 87,360 180,960 Hanes Company Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 Amount 20Y2 Percent 20Y1 Amount 20Y1 Percent $162,240 %
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The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $607,488 $558,507 Total investments 60,906 46,462 Total property, plant, and equipment 941,840 669,510 Total current liabilities 100,866 85,664 Total long-term liabilities 292,628 231,155 Preferred 9% stock, $100 par 90,744 90,744 Common stock, $10 par 568,743 568,743 Paid-in capital in excess of par-common stock 67,886 67,886 Retained earnings 489,367 230,287 Using the balance sheets for Kellman Company, if net income is $112,113 and interest expense is $33,379 for Year 2, what is the return on total assets for the year (round percent to two decimal points)? a. 10.31% b. 8.80% Oc. 10.09% Od. 6.96%
The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Year 2 Year 1 Total current assets $605,971 $560,666 Total investments 65,017 44,141 Total property, plant, and equipment 889,919 763,728 Total current liabilities 117,075 83,405 Total long-term liabilities 283,494 227,812 Preferred 9% stock, $100 par 82,758 82,758 Common stock, $10 par 554,007 554,007 Paid-in capital in excess of par-common stock 66,056 66,056 Retained earnings 457,517 354,497 Using the balance sheets for Kellman Company, if net income is $119,549 and interest expense is $36,122 for Year 2, and the market price of common shares is $46, what is the price-earnings ratio on common stock for Year 2 (rounded to two decimal places)? a.2.02 b.10.78 c.10.63 d.22.77
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[The following information applies to the questions displayed below.] Lydex Company's financial statements for the last two years are as follows:Lydex CompanyComparative Balance Sheet This YearLast YearAssets Current assets: Cash$ 860,000$ 1,100,000Marketable securities0300,000Accounts receivable, net2, 300, 0001,400,000 Inventory 3,500,0002, 000, 000Prepaid expenses 240, 000180,000 Total current assets6, 900, 0004, 980, 000 Plant and equipment, net9,320,0008, 950,000 Total assets$ 16,220,000$ 13,930,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities$ 3,910, 000$ 2,780,000 Note payable, 10 % 3,600,0003, 000, 000 Total liabilities 7, 510, 0005, 780,000 Stockholders' equity: Common stock, $75 par value 7, 500, 0007, 500,000 Retained earnings 1,210,000650,000 Total stockholders' equity8, 710, 0008, 150,000 Total liabilities and stockholders' equity$ 16, 220, 000$ 13,930,000Lydex CompanyComparative Income Statement and Reconciliation This YearLast YearSales (all on…
Use the following information for the next three questions:The ledger of COLTISH UNDISCIPLINED Co. in 20x1 includes the following:Jan. 1, 20x1 Dec. 31, 20x1Current assets 1,200,000 ?Noncurrent assets 4,000,000 ?Current liabilities 900,000 1,000,000Noncurrent liabilities ? 3,000,000 Additional information:- COLTISH’s working capital as of December 31, 20x1 is twice as much as the working capital as of January 1, 20x1.- Total equity as of January 1, 20x1 is ₱1,700,000. Profit for the year is ₱2,400,000 while dividends declared amounted to ₱1,000,000. There were no other changes in equity during the year. How much is the total current assets as of December 31, 20x1?a. 1,600,000b. 800,000c. 300,000d. 2,200,000
Use the following information for the next three questions:The ledger of COLTISH UNDISCIPLINED Co. in 20x1 includes the following:Jan. 1, 20x1 Dec. 31, 20x1Current assets 1,200,000 ? Noncurrent assets 4,000,000 ? Current liabilities 900,000 1,000,000Noncurrent liabilities ? 3,000,000 Additional information:- COLTISH’s working capital as of December 31, 20x1 is twice as much as the working capital as of January 1, 20x1. - Total equity as of January 1, 20x1 is ₱1,700,000. Profit for the year is ₱2,400,000 while dividends declared amounted to ₱1,000,000. There were no other changes in equity during the year.How much is the total noncurrent liabilities as of January 1, 20x1?a. 2,600,000b. 2,800,000c. 3,200,000d. 3,400,000
Balance sheet data for Kwan Company on December 31, the end of two recent fiscal years, follow: Current Year Previous Year Current assets $285,820 $179,920 Property, plant, and equipment 516,320 463,640 Intangible assets 119,860 48,440 Current liabilities 175,180 96,880 Long-term liabilities 378,020 283,720 Common stock 92,200 89,960 Retained earnings 276,600 221,440 Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place. Kwan Company Comparative Balance Sheet For the Years Ended December 31 Current Current Previous Previous year year year year Amount Percent Amount Percent Current assets $285,820 $179,920 Property, plant, and equipment 516,320 % 463,640 % Intangible assets 119,860 48,440 Total assets $922,000 $692,000 Current liabilities $175,180 % $96,880 % Long-term…
The balance sheet data of Randolph Company for two recent years appears below: Assets: Year 2 Year 1 Current assets $ 440 $280 Plant assets 675 520 Total assets $1,115 $800 Liabilities and stockholders' equity: Current liabilities $ 280 $120 Long-term debt 250 160 Common stock 325 320 Retained earnings 260 200 Total liabilities and stockholders' equity $1,115 $800 Using horizontal analysis, show the percentage change for each balance sheet item using Year 1 as a base year. Using vertical analysis, prepare a comparative balance sheet. Round percentages to one decimal place.

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Kellman Company
	Year 2	Year 1
Total current assets	$600,000	$560,000
Total investments	60,000	40,000
Total property, plant, and equipment	900,000	700,000
Total current liabilities	125,000	65,000
Total long-term liabilities	350,000	250,000
Preferred 9% stock, $100 par	100,000	100,000
Common stock, $10 par	600,000	600,000
Paid-in capital in excess of par—Common stock	75,000	75,000
Retained earnings	310,000	210,000