The following data are provided: December 31 2011 2010 Cash $ 375,000 $ 250,000

Question

The following data are provided:

December 31
2011 2010
Cash $ 375,000 $ 250,000
Accounts receivable (net) 400,000 300,000
Inventories 650,000 550,000
Plant assets (net) 2,000,000 1,625,000
Accounts payable 275,000 200,000
Taxes payable 50,000 25,000
Bonds payable 350,000 350,000
10% Preferred stock, $50 par 500,000 500,000
Common stock, $10 par 600,000 450,000
Paid-in capital 400,000 325,000
Retained earnings 1,000,000 875,000
Net credit sales 3,200,000
Cost of goods sold 2,100,000
Operating expenses 725,000
Net income 375,000

Additional information: Depreciation included in cost of goods sold and operating expenses is $305,000. On May 1, 2011, 15,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2011.

The rate of return on common stock equity for 2011 is



375

Explanation / Answer

The following data are provided: December 31 2011 2010 Cash $ 375,000 $ 250,000 Accounts receivable (net) 400,000 300,000 Inventories 650,000 550,000 Plant assets (net) 2,000,000 1,625,000 Accounts payable 275,000 200,000 Taxes payable 50,000 25,000 Bonds payable 350,000 350,000 10% Preferred stock, $50 par 500,000 500,000 Common stock, $10 par 600,000 450,000 Paid-in capital 400,000 325,000 Retained earnings 1,000,000 875,000 Net credit sales 3,200,000 Cost of goods sold 2,100,000 Operating expenses 725,000 Net income 375,000 Additional information: Depreciation included in cost of goods sold and operating expenses is $305,000. On May 1, 2011, 15,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2011. The rate of return on common stock equity for 2011 is 375 / 2,000.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.