23) Island Coffee Company reported the following for 2012: Eamings/share of Mark

Question

23) Island Coffee Company reported the following for 2012: Eamings/share of Market price per share of common stock Number of shares of common stock outstanding: Net income: Dividends/share $19.23 $67.00 75,000 $54,000 $6.73 What is the price earnings ratio for Island Coffee Company (rounded to two decimals)? D) 3.48 A) 2.85 B) 0.28 C) 9.96 24) Caesar Corporation the following for 2012: Earnings/share of Market price per share of common stock: Number of shares of common stock outstanding: Net income Dividends/share: $17.68 $52 52,000 $48,000 $7.14 What is the dividend yield for Caesar Corporation (to the nearest tenth of a percent)? A) 34.0% B) 13.7% C) 92.3% D) 40.4% 25) If Island Coffee's net sales decreased from $90,000 in year 1 to $45,000 in year 2 and its cost of goods sold decreased from $30,000 in year 1 to $20,000 in year 2, the vertical analysis based on sales would show the following for cost of goods sold for the two periods (rounded to nearest tenth of a peroent) A) 33.3% and 44.4%. C) 225% and 300%. B) 44.4% and 33.3%. D) 300% and 225%.

Explanation / Answer

23. D

P/E ratio = Market price per share / EPS

= 67 / 19.23

= 3.48

24. B

D/Y = (Dividend per share / Market price per share) * 100

= (7.14 / 52) * 100

= 13.73%

25. A

COGS to sales ratio = (COGS / Sales) * 100

Year 1 = (30,000/90,000)*100

= 33.33%

Year 2 = (20,000/45,000)*100

=44.44%

4. C

Stated rate is the rate which is mentioned on the bonds

5. C

Bond issue =300,000 * 105%

= 315,000

6. D

Interest due = Face value * Interest rate * 6/12 months

= 200,000 * 6% * 6/12 months

= $6,000

It will be paid in cash so entry will be Interest expense (Dr.) 6,000 Cash (Cr.) 6,000

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

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