Question
Doonan Corporation has provided the following financial data from its balance sheet and income statement: Year...
Doonan Corporation has provided the following financial data from its balance sheet and income statement:
| Year 2 | Year 1 | |||||
| Total assets | $ | 1,489,000 | $ | 1,440,000 | ||
| Stockholders' equity: | ||||||
| Common stock, $4 par value | $ | 360,000 | $ | 360,000 | ||
| Additional paid-in capital | $ | 70,000 | $ | 70,000 | ||
| Retained earnings | $ | 570,000 | $ | 550,000 | ||
| Total stockholders' equity | $ | 1,000,000 | $ | 980,000 | ||
| Interest expense | $ | 15,000 | ||||
| Income taxes (35%) | $ | 14,162 | ||||
| Net income | $ | 26,300 | ||||
The market price of common stock at the end of Year 2 was $4.79 per share.
The company’s return on total assets for Year 2 is closest to:
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Accounts receivable
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180,000
Inventory
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In millions
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Cash
1,588
Common stock
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Cost of goods sold
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Debt and other borrowings
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Income tax expense
3,054
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15,836
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Inventory 320,000 380,000 Plant and equipment, net 680,000 640,000
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Stockholders' Equity Accounts payable $ 360,000 $ 310,000 Long-term
debt 1,500,000 1,500,000 Stockholders' equity 160,000 310,000 Total
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$
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$
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Accounts receivable
450,000
530,000
Inventory
320,000
380,000
Plant and equipment, net
680,000
680,000
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250,000
280,000
Land (undeveloped)
180,000
170,000
Total assets
$
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$
2,160,000
Liabilities and Stockholders'
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$
360,000
$
310,000
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1,500,000
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350,000
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Balance
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$
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$
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Accounts receivable
450,000
530,000
Inventory
320,000
380,000
Plant and equipment, net
680,000
660,000
Investment in ABC, Inc.
250,000
280,000
Land (undeveloped)
180,000
170,000
Total assets
$
2,020,000
$
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Accounts payable
$
360,000
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$
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$
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Accounts receivable
450,000
530,000
Inventory
320,000
380,000
Plant and equipment, net
680,000
640,000
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Inventory 320,000 380,000 Plant and equipment, net 680,000 660,000
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$
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Accounts
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450,000
530,000
Inventory
320,000
380,000
Plant and
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640,000
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