Reference no: EM131358432
Problem 1: Cepeda Company manufactures backpacks. During 2014, Cepeda issued bonds at 11% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Cepeda Company for the years 2014 and 2013.
|
|
2014
|
2013
|
|
Sales revenue
|
$9,918,000
|
$9,918,000
|
|
Net income
|
2,468,480
|
2,755,000
|
|
Interest expense
|
544,000
|
152,320
|
|
Tax expense
|
738,340
|
826,500
|
|
Dividends paid on common stock
|
968,320
|
1,116,288
|
|
Dividends paid on preferred stock
|
326,400
|
326,400
|
|
Total assets (year-end)
|
15,979,000
|
18,596,250
|
|
Average total assets
|
17,068,000
|
19,326,144
|
|
Total liabilities (year-end)
|
6,528,000
|
3,264,000
|
|
Avg. total common stockholders' equity
|
10,227,200
|
15,340,800
|
(a) Use the information above to calculate the following ratios for both years:
Problem 2: The stockholders' equity accounts of Miley Corporation on January 1, 2014, were as follows.
|
Preferred Stock (8%, $100 par noncumulative, 5,100 shares authorized)
|
$306,000
|
|
Common Stock ($4 stated value, 325,600 shares authorized)
|
1,041,920
|
|
Paid-in Capital in Excess of Par Value-Preferred Stock
|
12,240
|
|
Paid-in Capital in Excess of Stated Value-Common Stock
|
260,480
|
|
Retained Earnings
|
704,300
|
|
Treasury Stock-(5,100 common shares)
|
40,800
|
During 2014, the corporation had the following transactions and events pertaining to its stockholders' equity.
Feb. 1 Issued 4,600 shares of common stock for $32,200.
Mar. 20 Purchased 1,360 additional shares of common treasury stock at $9 per share.
Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1.
Nov. 1 Paid the dividend declared on October 1.
Dec. 1 Declared a $0.80 per share cash dividend to common stockholders of record on December 15, payable December 31, 2014.
Dec. 31 Determined that net income for the year was $281,600. Paid the dividend declared on December 1.
Journalize the transactions.
Date Account Titles and Explanation Debit Credit
Enter the beginning balances in the accounts and post the journal entries to the stockholders' equity accounts.
Prepare the stockholders' equity section of the balance sheet at December 31, 2014.
Calculate the payout ratio, earnings per share, and return on common stockholders' equity.
Attachment:- Assignment.rar