You are planning to analyze Voltek Companys December 31, Year 6, balance sheet. The following information is

Question:

You are planning to analyze Voltek Company’s December 31, Year 6, balance sheet. The following information is available:

1. Beginning and ending balances are identical for both accounts receivable and inventory.

2. Net income is $1,300.

3. Times interest earned is 5(income tax esare zero).Company has 5% bonds out standing and issued at par.

4. Net profit margin is 10%. Gross profit margin is 30%. Inventory turnover is 5.

5. Days’ sales in receivables is 72 days.

6. Sales to end-of-year working capital is 4. Current ratio is 1.5.

7. Acid-test ratio is 1.0 (excludes prepaid expenses).

8. Plant and equipment (net) is $6,000. It is one-third depreciated.

9. Dividends paid on 8% nonparticipating preferred stock are $40. There is no change in common shares outstanding during Year 6. Preferred shares were issued two years ago at par.

10. Earnings per common share are $3.75.

11. Common stock has a $5 par value and was issued at par.

12. Retained earnings at January 1, Year 6, are $350.

Required:

a. Given the information available, prepare this company’s balance sheet as of December 31, Year 6 (include the following account classifications: cash, accounts receivable, inventory, prepaid expenses, plant and equipment (net), current liabilities, bonds payable, and stockholders’ equity).

b. Determine the amount of dividends paid on common stock in Year6.

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... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... 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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...