Information for Bonita Industries is given below: Bonita Industries Balance Shee
ID: 2536842 • Letter: I
Question
Information for Bonita Industries is given below:
Bonita Industries
Balance Sheet
December 31, 2018
Assets
Equities
$ 315000
$ 626000
1960000
186000
2441000
224000
1800000
1984000
261000
750000
74900
$7035900
1129000
2548900
(228000)
$7035900
Bonita Industries
Income Statement
Year Ended December 31, 2018
$9500000
6200000
3300000
1500000
1800000
470000
$ 1330000
Additional information:
There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2018, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2018. Assume that preferred dividends for the current year have not been declared.
The rate of return for 2018 based on the year-end common stockholders' equity was
Bonita Industries
Balance Sheet
December 31, 2018
Assets
Equities
Cash$ 315000
Accounts payable$ 626000
Accounts receivable (net)1960000
Income taxes payable186000
Inventories2441000
Miscellaneous accrued payables224000
Plant and equipment, Bonds payable (8%, due 2020)1800000
net of depreciation1984000
Preferred stock ($100 par, 6% Patents261000
cumulative nonparticipating)750000
Other intangible assets74900
Common stock (no par, 60,000 Total Assets$7035900
shares authorized, issued and outstanding)1129000
Retained earnings2548900
Treasury stock-1500 shares of preferred(228000)
Total Equities$7035900
Bonita Industries
Income Statement
Year Ended December 31, 2018
Net sales$9500000
Cost of goods sold6200000
Gross profit3300000
Operating expenses (including bond interest expense)1500000
Income before income taxes1800000
Income tax470000
Net income$ 1330000
Explanation / Answer
Rate on Return for 2018= Net Income/Shareholders funds
=1330000/(1129000+2548900)
=1330000/3677900
Therefore Answer is (a) 1330000 ÷ 3677900.