Calculate and show work for following questions 1) Compute the earnings per shar

Question

Calculate and show work for following questions

1) Compute the earnings per share for current and previous years. (Round answer to 1 decimal place)

2) Stockholders equity totaled $115,000 at the beginning of the previous year. Compute the Return on equity ratios for current and previous year. (Round answer 1 decimal place)

3)Net property and equipment totaled $125,000 at the beginning of the previous year. Calculate the turnover asset ratio for precious and current year. (Round answer to 2 decimal places)

4)Compute the debts to assets ratio for current and previous years. (Round answers 2 decimal places)

The comparative financial statements prepared at December 31 for Pinnacle Plus showed the following summarized data Current Year Previous Year Income Statement Sales Revenue Cost of Goods Sold $185,000 82.000 $159,000 78,000 Gross Profit Operating Expenses Interest Expense 103,000 51,000 5,500 81,000 45,000 5,500 Income before Income Tax Expense Income Tax Expense (30%) 46,500 13,950 30,500 9,150 Net Income $ 32,550 21,350 Balance Sheet Cash Accounts Receivable, Net Inventory Property and Equipment, Net $ 89,075 32.000 40,000 110,000 $ 23,000 27,000 53,000 120,000 Total Assets $271,075 $223,000 Accounts Payable Income Tax Pavable $ 57,000 33,500 1,250 55,000 1,375 55,000 Note Payable (long-term) Total Liabilities Common Stock (par $10) Retained EarningsT 113,375 99.000 58,700 89,750 99.000 34,250 Total Liabilities and Stockholders' Equity $271,075 $223,000 f During the current year, cash dividends amounting to $8,100 were declared and paid.

Explanation / Answer

PINNACLE PLUS Comparative Financial Statements December 31 Current Year Previous Year Income Statement Sales revenue $     185,000 $     159,000 Cost of goods sold           82,000           78,000 Gross profit         103,000           81,000 Operating expenses           51,000           45,000 Interest expense            5,500            5,500 Income before income taxes           46,500           30,500 Income tax expense           13,950            9,150 Net income $       32,550 $       21,350 Balance Sheet Cash           89,075           23,000 Accounts receivable (net)           32,000           27,000 Inventory           40,000           53,000 Property and equipment (net)         110,000         120,000 $     271,075 $     223,000 Accounts Payable           57,000           33,500 Income Tax Payable            1,375            1,250 Note Payable           55,000           55,000 Total Liabilities         113,375           89,750 Common Stoc(Par $10)           99,000           99,000 Retained Earning $       58,700 $       34,250 Total Liabilities and shareholder Equity         271,075         223,000 Common Stock outstanding            9,900            9,900 Earning Per Share=Net income after tax/Number of shares outstanding Earning Per Share= $               3 2.16 Average Shareholder Equity 145475 124125 Return on Equity=Net Income/Average of Shareholder Equity Return on Equity= $          0.22 $          0.17 Turnover Assets Ratio =Net Sales/Average Total assets Average Total Assets= 115000 122500 Turnover Assets Ratio = $          1.61 $          1.30 Debt to Assets Ratio=Total Liabilities/Total Assets Debt to Assets Ratio= 0.42 0.40

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