Hello, I need help answering the questions that are boxed in red. Selected year-

Question

Hello, I need help answering the questions that are boxed in red.

Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit, selected balance sheet amounts at December 31, 2016, were Inventory, $47,900; total assets, $249,400; common stock, $88,000; and retalned eamings, $34,062) CORPDRATION Income Statenent For Year Ended December 31, 2817 $ Sales Cost of goods sold Gross profit Operating expenses Interest expense Income before taxes Income taxes Net income 451,686 298,258 153,358 99,580 3 ,see se,ese 2,162 29,888 CABOT CORPORATION 8alance Sheet 31, 2817 Liabilities and Equity Assets Cash Short-term Lnvestments Accounts receivable, net Notes receivable (trade) Merchandise inventory s 16,500 3,680 4,780 $ 8,888 Accounts payable 9,488 Accrued wages payable 29,480 Income taxes payable 7,8e0 38,15 Long-term note payable, secured by 72,488 mortgage on plant assets Prepaid expenses Plant assets, net Total assets 2,988 Common stock 154,3 etained earnings 249,158 Total liabilities and oquity 88,?@e 63,958 249,158 These are short-term notes recelvable arising from customer (trade) sales. Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) Inventory turnover, (5) days' sales In Inventory (6) debt-to-equity ratio, 7) times Interest earned, (8) profit margin ratio, (9) total asset tumover, (10) retum on total assets, and (11) return on common stockholders' equlty. (Do not round Intermediate calculations.) Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 Req 9 Req 10 Req 11 Compute the return on common stockholders' equity. Choose Numerator: Choose -Return On Common Stockholders' Equity referred dividends Average common s equityReturn on common stockholders' equity 2017: 29.888 01% Prey 1 of Next

Explanation / Answer

Beginning Common Stockholders Equity = $88,000 + $34,062 = $1,22,062

Ending Common Stockholders Equity = $88,000 + $63,950 = $1,51,950

Average Common Stockholders Equity = [$122062 + $151950 ] /2 = $ 1,37,006

Return on Common Stockholders Equity = [Net Income – Preferred Dividend ] / Average Common Stockholders Equity

= [ $29,888 – 0* ] / $1,37,006

= 21.8151%

= 21.82% (Rounded)

*There is no preferred share capital and therefore there will not be any preferred dividend

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