The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and
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The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets | |
Cash and short-term investments | $40,000 |
Accounts receivable (net) | 30,000 |
Inventory | 40,000 |
Property, plant and equipment | 220,000 |
Total Assets | $330,000 |
Liabilities and Stockholders' Equity | |
Current liabilities | $60,000 |
Long-term liabilities | 70,000 |
Stockholders' equity-common | 200,000 |
Total Liabilities and Stockholders' Equity | $330,000 |
Income Statement | |
Sales | $90,000 |
Cost of goods sold | 44,000 |
Gross profit | 46,000 |
Operating expenses | 30,000 |
Net income | $16,000 |
Number of shares of common stock | 5,000 |
Market price of common stock | $22 |
Dividends per share | 1.00 |
What is the return on common stockholders' equity for Rural?
A) 4.8%
B) 8%
C) 37.5%
D) 16%
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old
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