Reference no: EM132935031
Question - The information on the following page was obtained from the records of Breanna Inc.:
Accounts receivable $40,000
Accumulated depreciation 208,000
Cost of goods sold 512,000
Income tax expense 32,000
Cash 260,000
Net sales 800,000
Equipment 480,000
Selling, general, and administrative expenses 136,000
Common stock (36,000 shares) 360,000
Accounts payable 60,000
Retained earnings, 1/1/19 92,000
Interest expense 24,000
Merchandise inventory 148,000
Long-term debt 160,000
Dividends declared and paid during 2019 48,000
Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year.
Required -
Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Breanna Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e.
What is the company's average income tax rate?
What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.
What is the par value per share of common stock?
What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?
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