Stargel Inc. common stock was $119.70 on December 31, 2014.
Stargel Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2014 and 2013
2014 2013
Retained earnings, January 1 . . . . . . . . . . . . . .$5,375,000 $4,545,000
Add net income for year . . . . . . . . . . . . . . . . . . . 900,000 925,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$6,275,000 $5,470,000
Deduct dividends:
On preferred stock . . . . . . . . . . . . . . . . . . . . . . $ 45,000 $ 45,000
On common stock. . . . . . . . . . . . . . . . . . . . . . . . .50,000 50,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,000 $ 95,000
Retained earnings, December 31 . . . . . . . . . . .$6,180,000 $5,375,000
Stargel Inc.
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014 2013
Sales (all on account) . . . . . . . . . . . . . . . . . . . $10,050,000 $9,450,000
Sales returns and allowances . . . . . . . . . . . . . . .50,000 50,000
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000,000 $9,400,000
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . 5,350,000 4,950,000
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,650,000 $4,450,000
Selling expenses . . . . . . . . . . . . . . . . . . . . . . .$ 2,000,000 $1,880,000
Administrative expenses . . . . . . . . . . . . . . . . . 1,500,000 1,410,000
Total operating expenses . . . . . . . . . . . . . . . . $ 3,500,000 $3,290,000
Income from operations . . . . . . . . . . . . . . . . . $ 1,150,000 $1,160,000
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . .150,000 140,000
$ 1,300,000 $1,300,000
Other expense (interest) . . . . . . . . . . . . . . . . . . 170,000 150,000
Income before income tax . . . . . . . . . . . . . . . $ 1,130,000 $1,150,000
Income tax expense . . . . . . . . . . . . . . . . . . . . . .230,000 225,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 900,000 $ 925,000
Stargel Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1.
20Y2 20Y1
Assets
Current assets:
Cash $500,000 $400,000
Marketable securities 1,010,000 1,000,000
Accounts receivable (net) 740,000 510,000
Inventories 1,190,000 950,000
Prepaid expenses 250,000 229,000
Total current assets $3,690,000 $3,089,000
Long-term investments 2,350,000 2,300,000
Property, plant, and equipment (net) 3,740,000 3,366,000
Total assets $9,780,000 $8,755,000
Liabilities
Current liabilities $900,000 $880,000
Long-term liabilities:
Mortgage note payable, 10% $200,000 $0
Bonds payable, 10% 1,500,000 1,500,000
Total long-term liabilities $1,700,000 $1,500,000
Total liabilities $2,600,000 $2,380,000
Required:
Determine the following measures for 20Y2, rounding to one decimal place, except dollar amounts which should be rounded to the nearest cent. Assume 365 days a year.
Return on total assets %
Return on stockholders’ equity %
Return on common stockholders’ equity %