Hartzog Corporation\'s most recent balance sheet and income statement appear bel

Question

Hartzog Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $250 $220 Accounts receivable 400 380 Inventory 200 350 Prepaid expenses 40 40 Total current assets 890 990 Plant and equipment, net 920 930 Total assets 1,810 1,920 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $110 $240 Accrued liabilities 20 20 Notes payable, short term 150 150 Total current liabilities 280 410 Bonds payable 230 250 Total liabilities 510 660 Stockholders' equity: Preferred stock, $100 par value, 5% 100 240 Common stock, $2 par value 610 610 Additional paid-in capital--common stock 190 190 Retained earnings 400 220 Total stockholders' equity 1,300 1,260 Total liabilites & stockholders' equity 1,810 1,920 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $3,900 Cost of goods sold 2,340 Gross margin 1,560 Selling and administrative expense 1,150 Net operating income 410 Interest expense 60 Net income before taxes 350 Income taxes (30%) 105 Net income 245 Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.04 per share. The times interest earned for Year 2 is closest to: 3.00 6.83 4.08 5.83

Explanation / Answer

(280 net income - 5 preferred dividends) / 107 = $2.57 7.70 market price per share / 2.57 earnings per share = 3.00 62 total dividends / 107 shares outstanding = $0.58 dividends per share $0.58 dividends per share / 2.57 earnings per share = 22.6%

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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