Problem 14-2A The comparative statements of Painter Tool Company are presented b

Question

Problem 14-2A The comparative statements of Painter Tool Company are presented below. PAINTER TOOL COMPANY Income Statement For the Years Ended December 31 2017 $1,812,700 1,007,700 805,000 516,800 288,200 2016 Net sales Cost of goods sold Gross proft Selling and administrative expenses Income from operations Other expenses and losses $1,746,500 981,000 765,500 477,000 288,500 Interest expense Income before income taxes Income tax expense Net income 18,400 269,800 82,000 $187,800 13,600 274,900 77,000 $197,900 PAINTER TOOL COMPANY Balance Sheets December 31 Assets 2017 2016 Current assets Cash $59,100 69,400 $65,000 49,900 Short-term investments

Explanation / Answer

Average common stockholders equity = [569300+468700]/2

519000

187800/519000

.362 or 36.2%

Average asset= [970600+854600]/2

912600

187800/912600

.206 or 20.6%

368600/202700

1.82 : 1

Formula Other calculation a)Earning per share Net Income /weighted average common shares 187800/51800 = $ 3.63 per share b)Return on common stockholders equity Net Income /Average common stockholders equity

Average common stockholders equity = [569300+468700]/2

519000

187800/519000

.362 or 36.2%

c)Return on asset Net income /Average asset

Average asset= [970600+854600]/2

912600

187800/912600

.206 or 20.6%

d)Current ratio current asset /current liabilities

368600/202700

1.82 : 1

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