The balance sheet for Kronos Inc. at the end of the current fiscal year indicated the following:

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The balance sheet for Kronos Inc. at the end of the current fiscal year indicated the following:

Bonds payable, 10% (issued in 2002, due in 2022) ...........$3,750,000

Preferred $4 stock, $40 par ..................... 2,000,000

Common stock, $10 pat ....................... 3,600,000

Income before income tax was $2,400,000, and income taxes were $400,000 for the current year. Cash dividends paid on common stock during the current year totaled $720,000. The common stock was selling for $72 per share at the end of the year. Determine each of the following:

(a) Number of times bond interest charges are earned,

(b) Number of times preferred dividends are earned,

(c) Earning per share on common stock,

(d) Price-earnings ratio,

(e) Dividends per share of common stock, and

(f) Dividend yield. Round to one decimal place expect earnings per share, which should be rounded to two decimal place.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Financial and Managerial Accounting

ISBN: 978-0538480895

11th Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

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