Dividends on common stock during year 2 totaled 40 thousand

Assignment Help Accounting Basics

Reference no: EM13579347

Hartzog Corporation's most recent balance sheet and income statement appear below:

Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars)
	Year 2	Year 1
Assets
Current assets:
Cash	$ 290	$ 260
Accounts receivable	370	350
Inventory	240	250
Prepaid expenses	30	30
Total current assets	930	890
Plant and equipment, net	820	830
Total assets	$1,750	$1,720

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 310	$ 280
Accrued liabilities	10	10
Notes payable, short term	70	70
Total current liabilities	390	360
Bond payable	270	290
Total liabilities	660	650
Stockholders' equity:
Preferred stock, $100 par value, 5%	100	100
Common stock, $2 par value	400	400
Additional paid-in-capital--common stock	300	300
Retained earnings	290	270
Total stockholders' equity	1,090	1,070
Total liabilities & stockholders' equity	$1,750	$1,720

Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars)
Sales (all on account)	$1,460
Cost of goods sold	770
Gross margin	690
Selling and administrative expense	564
Net operating income	126
Interest expense	36
Net income before taxes	90
Income taxes (30%)	27
Net income	$ 63

Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock totaled $3 thousand. The market price of common stock at the end of Year 2 was $7.15 per share.

Calculate the gross margin percentage for Year 2.

Reference no: EM13579347

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