(a) Matthias Medical manufactures hospital beds and other institutional furnitur
ID: 2574885 • Letter: #
Question
(a)
Matthias Medical manufactures hospital beds and other institutional furniture. The company’s comparative balance sheet and income statement for 2012 and 2013 follow.Matthias Medical
Comparative Balance Sheet
As of December 31 2013 2012 Assets Current assets Cash $309,000 $417,400 Accounts receivable, net 1,065,600 776,500 Inventory 731,000 681,100 Other current assets 306,000 247,000 Total current assets 2,411,600 2,122,000 Property, plant, & equipment, net 9,513,370 8,439,210 Total assets $11,924,970 $10,561,210 Liabilities and Stockholders’ Equity Current liabilities $3,154,000 $2,846,000 Long-term debt 3,702,700 3,892,650 Total liabilities 6,856,700 6,738,650 Preferred stock, $5 par value 58,600 58,600 Common stock, $0.25 par value 178,000 103,800 Retained earnings 4,831,670 3,660,160 Total stockholders’ equity 5,068,270 3,822,560 Total liabilities and stockholders’ equity $11,924,970 $10,561,210 Matthias Medical
Comparative Income Statement and Statement of Retained Earnings
For the Year 2013 2012 Sales revenue (all on account) $10,440,000 $9,613,950 Cost of goods sold 4,879,000 5,298,750 Gross profit 5,561,000 4,315,200 Operating expenses 2,840,200 2,634,200 Net operating income 2,720,800 1,681,000 Interest expense 388,000 308,700 Net income before taxes 2,332,800 1,372,300 Income taxes (30%) 699,840 411,690 Net income $1,632,960 $960,610 Dividends paid Preferred dividends 29,450 29,450 Common dividends 432,000 449,000 Total dividends paid 461,450 478,450 Net income retained 1,171,510 482,160 Retained earnings, beginning of year 3,660,160 3,178,000 Retained earnings, end of year $4,831,670 $3,660,160
Explanation / Answer
Earnings per Share = (Net Income - Preferred dividend) / Average shares outstanding for the 2013
Earnings per share = (1632960-29450) / 429000 = $3.74 Answer
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