Compute tandys 2020 return on common stockholders equity

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Reference no: EM132359879

Question

Richard Tandy Company reported the following balances at December 31, 2019: common stock $500,000; paid-in capital in excess of par-common stock $200,000; retained earnings $350,000. During 2020, the following transactions affected stockholder's equity.

Issued preferred stock with a par value of $200,000 for $230,000.

Purchased treasury stock (common) for $70,000.

Earned net income of $240,000.

Declared and paid cash dividends of $86,000 ($16,000 preferred).

Instructions:

(a) Prepare the stockholders' equity section of Richard Tandy Company's December 31, 2020, balance sheet.

(b) Compute Tandy's 2020 return on common stockholders' equity.

Reference no: EM132359879

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