Gerrard Construction Company is an excavation contractor. The following summarized data (in thousands) are taken from...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Gerrard Construction Company is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2022, financial statements: For the Year Ended December 31, 2022: Net revenues Cost of services provided Depreciation expense Operating income Interest expense Income tax expense Net income At December 31, 2022: Assets Cash and short-term investments Accounts receivable, net Property, plant, and equipment, net Total assets Liabilities and Stockholders' Equity Accounts payable Income taxes payable Notes payable (long term) Paid-in capital Retained earnings Total liabilities and stockholders' equity $ 32,200 11,600 5,500 $ 15,100 3,900 3,300 $ 7,900 $ 3,000 9,900 86,400 $ 99,300 $ 1,700 1,900 53,500 13,000 29,200 $ 99,300 At December 31, 2021, total assets were $81,900 and total stockholders' equity was $34,800. There were no changes in notes payable or paid-in capital during 2022. At December 31, 2021, total assets were $81,900 and total stockholders' equity was $34,800. There were no changes in notes payable or paid-in capital during 2022. Required: a. The table above represents income statement and balance sheet for Gerrard Construction Company. Other than these statements, what other financial statements are required? b. Indicate the note disclosures that should be provided by Gerrard Construction Company. c. Assume that the balance of "Accounts Receivable, net" at December 31, 2021, was $8,200. Calculate the following activity measures for Gerrard Construction Company for the year ended December 31, 2022: 1. Accounts receivable turnover. 2. Number of days' sales in accounts receivable. d. Calculate the following financial leverage measures for Gerrard Construction Company at December 31, 2022: 1. Debt ratio. 2. Debt/equity ratio. e. Gerrard Construction Company wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of 3.8 million have on the company's debt ratio and debt/equity ratio? f. 1. Calculate the amount of dividends declared and paid during the year ended December 31, 2022. 2. Review the answer from requirement f1 at this time. Assume that Gerrard Construction Company had 1,197,000 shares of $1 par value common stock outstanding throughout 2022, and that the market price per share of common stock at December 31, 2022, was $18.72. Calculate the following profitability measures for the year ended December 31, 2022: 1. Earnings per share of common stock. 2. Price/earnings ratio. 3. Dividend yield. 4. Dividend payout ratio. Gerrard Construction Company is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2022, financial statements: For the Year Ended December 31, 2022: Net revenues Cost of services provided Depreciation expense Operating income Interest expense Income tax expense Net income At December 31, 2022: Assets Cash and short-term investments Accounts receivable, net Property, plant, and equipment, net Total assets Liabilities and Stockholders' Equity Accounts payable Income taxes payable Notes payable (long term) Paid-in capital Retained earnings Total liabilities and stockholders' equity $ 32,200 11,600 5,500 $ 15,100 3,900 3,300 $ 7,900 $ 3,000 9,900 86,400 $ 99,300 $ 1,700 1,900 53,500 13,000 29,200 $ 99,300 At December 31, 2021, total assets were $81,900 and total stockholders' equity was $34,800. There were no changes in notes payable or paid-in capital during 2022. At December 31, 2021, total assets were $81,900 and total stockholders' equity was $34,800. There were no changes in notes payable or paid-in capital during 2022. Required: a. The table above represents income statement and balance sheet for Gerrard Construction Company. Other than these statements, what other financial statements are required? b. Indicate the note disclosures that should be provided by Gerrard Construction Company. c. Assume that the balance of "Accounts Receivable, net" at December 31, 2021, was $8,200. Calculate the following activity measures for Gerrard Construction Company for the year ended December 31, 2022: 1. Accounts receivable turnover. 2. Number of days' sales in accounts receivable. d. Calculate the following financial leverage measures for Gerrard Construction Company at December 31, 2022: 1. Debt ratio. 2. Debt/equity ratio. e. Gerrard Construction Company wishes to lease some new earthmoving equipment from Caterpillar on a long-term basis. What impact (increase, decrease, or no effect) would a capital lease of 3.8 million have on the company's debt ratio and debt/equity ratio? f. 1. Calculate the amount of dividends declared and paid during the year ended December 31, 2022. 2. Review the answer from requirement f1 at this time. Assume that Gerrard Construction Company had 1,197,000 shares of $1 par value common stock outstanding throughout 2022, and that the market price per share of common stock at December 31, 2022, was $18.72. Calculate the following profitability measures for the year ended December 31, 2022: 1. Earnings per share of common stock. 2. Price/earnings ratio. 3. Dividend yield. 4. Dividend payout ratio.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The restrictions related to the nature of the decision variables are 1 X3, X4, X5 are real numbers XA, XB. XC. XD XE = binary variables XA. XB. XC. XD. XE 0, integer
-
What are the fundamental weaknesses of systems theories? What are the key components or elements in systems theory? What is the relationship between systems and ecological perspectives?
-
Athletes that test positive usually have a second sample tested independently to the first. What is the probability that an athlete who was clean would test positive on both the first and second...
-
Heights Academy, a private school, serves 500 students: 200 in the middle school (Grades 6 to 8) and 300 in the high school (Grades 9 to 12). Each school group has its own assistant principal, and...
-
Suppose that the continuously compounded interest rate is 6 percent per year, and the nine- month forward price for platinum is $1,750. What is todays spot price of platinum?
-
Determine Zi, Zo and Av for the network of Fig. 8.74 if yfs = 3000 μS and yos = 50 jus. +12 V 3.3 k2 10 1.1k
-
You are considering buying a 14-year, semiannual-coupon bond that has a coupon rate of 8.25 percent and a YTM of 8.25 percent. What should be the current yield of this bond? a. 6.00% b. 7.25% c....
-
Because of the individuality of people, there always exist differing views of what management is all about. Below are lists of possible perspectives and a selected group of organizational members....
-
Suppose that while practice free throws, you made 26 shots and missed 14. Based on these results, determine the experimental probability that you will miss your next free throw. The experimental...
-
Give the causes effect and solution of the given business problem. Format: Problem: The shortage of capital and cashflow of a business in the Philippines Causes: Effect: Solution: Note: Please...
-
Determine the reaction at Point B. The weight of the T-frame acts at G The mass of the T-frame is 50 kg Include a complete free body diagram. 200 N E 3.5 m Pulley Rope 40 1m 1.5 m A 1m D 1m 3m
-
Fern Inc. manufacturers custom furniture for both residential and commercial clients. Fern has a December 31 year-end. On September 1, Fern had two jobs in progress: Direct materials Direct labour...
-
Viggio Wines Louis Viggio was struggling to determine how to price his new offering of cabernet sauvignon wine (commonly called simply cab) from his winery. He knew that even though he was setting a...
-
1. _____ is a proprietary vulnerability scanner. It is often used by security administrators to find known weaknesses on Mac, Windows, and Linux operating systems. It can also be used for compliance...
-
case results might vary, the expected free cash flows are in the table below. Please use these numbers when completing this case. Year 0 Operating CF Operating CF Less: Inv in Op Cap Change in FA $ 1...
-
Was it a requirement for publicly listed corporations, during the Great Depression and the establishment of the Securities and Exchange Commission (SEC), to publish reports that were authored by...
-
In Exercises evaluate the limit, using LHpitals Rule if necessary. lim 07x cos x X
-
The following questions are based on the data contained in Exhibit 12-9. 1. Suppose actual production and sales were 8,000 units instead of 7,000 units. (a) Compute the sales-volume variance. Is the...
-
Belfair Kayak Company makes molded plastic kayaks. Standards costs for an entry-level whitewater kayak are: Direct materials, 60 kilograms @ $5.50 per kilogram Direct labour, 1.5 hours $16 per hour...
-
The emergency room at University Hospital uses a flexible budget based on patients seen as a measure of volume. An adequate staff of attending and on-call physicians must be maintained at all times,...
Study smarter with the SolutionInn App