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Financial Statements for Qualle Company Appear Below Total Dividends Paid During Year 2 Were $149,000,of Which $10,000

Question 182

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Financial statements for Qualle Company appear below:
 Financial statements for Qualle Company appear below:       \begin{array}{|l|r|}\hline&\begin{array}{r} \text { Qualle Company } \\ \text { Income Statement }\\\text { For the Year Ended December 31, Year 2} \\ \text { (dollars in thousands) } \end{array} \\ \hline \text { Sales (All on Account) } & \$ 2300 \\ \hline \text { Costs of Goods Sold } & \$ 1610 \\ \hline \text { Gross Margin } & \$ 690 \\ \hline \text { Operating Expenses } & \$ 270 \\ \hline \text { Net Operating Income } & \$ 420 \\ \hline \text { Interest Expense } & \$ 50 \\ \hline \text { Net Income before Taxes } & \$ 370 \\ \hline \text { Income Taxes (30\%) } & \$ 111 \\ \hline \text { Net Income } & \$ 259\\\hline  \end{array}   Total dividends paid during Year 2 were $149,000,of which $10,000 were preferred dividends.The market price of a common share on December 31,Year 2 was $280. Required: Calculate the following for Year 2: a)Earnings per share. b)Price-earnings ratio. c)Dividend yield ratio. d)Return on total assets. e)Return on common shareholders' equity. f)Book value per share.
 Qualle Company  Income Statement  For the Year Ended December 31, Year 2 (dollars in thousands)  Sales (All on Account) $2300 Costs of Goods Sold $1610 Gross Margin $690 Operating Expenses $270 Net Operating Income $420 Interest Expense $50 Net Income before Taxes $370 Income Taxes (30%) $111 Net Income $259\begin{array}{|l|r|}\hline&\begin{array}{r}\text { Qualle Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year 2} \\\text { (dollars in thousands) }\end{array} \\\hline \text { Sales (All on Account) } & \$ 2300 \\\hline \text { Costs of Goods Sold } & \$ 1610 \\\hline \text { Gross Margin } & \$ 690 \\\hline \text { Operating Expenses } & \$ 270 \\\hline \text { Net Operating Income } & \$ 420 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 370 \\\hline \text { Income Taxes (30\%) } & \$ 111 \\\hline \text { Net Income } & \$ 259\\\hline \end{array}
Total dividends paid during Year 2 were $149,000,of which $10,000 were preferred dividends.The market price of a common share on December 31,Year 2 was $280.
Required:
Calculate the following for Year 2:
a)Earnings per share.
b)Price-earnings ratio.
c)Dividend yield ratio.
d)Return on total assets.
e)Return on common shareholders' equity.
f)Book value per share.

Correct Answer:

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a)Earnings per share = (Net Income - Pre...

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