Use the following information for December 31 2008 December 31 2007 Cash$375,000
ID: 2351820 • Letter: U
Question
Use the following information for
December 31 2008 December 31 2007
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, 2008, 15,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2008.
Please show work.
The rate of return on common stock equity for 2008 is <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>
A) 375
Explanation / Answer
on solvING the answer will definitely be B) 375 ÷ 2,000 answer and C) 1,950 ÷ 55. answer
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