Reference no: EM131677493

Question - The information on the following page was obtained from the records of Breanna, Inc.:

Accounts receivable	$10,400
Accumulated depredation	51,600
Cost of goods sold	124,000
Income tax expense	9,500
Cash	62,000
Sales	192,000
Equipment	122,000
Selling, general, and administrative expenses	32,000
Common stock (8,700 shares)	94,000
Accounts payable	13,300
Retained earnings, 1/1/13	24,000
Interest expense	5,600
Merchandise inventory	37,100
Long-term debt	39,000
Dividends declared and paid during 2013	11,400

Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2013, and that all income statement items reflect activities that occurred during the year ended December 31, 2013. There were no changes in paid-in capital during the year.

Required:

a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2013, and a balance sheet at December 31, 2013, for Breanna, Inc. Based on the financial statements that you have prepared for part a. answer the questions in parts b-e.

b. What is the company's average income tax rate?

c. What interest rate is charged on long-term debt?

d. What is the par value share of common stock?

e. What is the company's policy (i.e. what proportion of the company's earnings are used for dividends)?