Use the following selected financial data from the balance sheet at the end of Year 2 and Year 1:
$\begin{array}{lcc}&\text { June 30, Year } 2&\text { June 30, Year } 1\
\text { Total current liabilities } & \$ 495,000 & \$ 320,000 \
\text { Bonds payable } & 600,000 & 500,000 \
\text { Common shares } & 800,000 & 800,000 \
\text { Retained earnings } & 200,000 & 100,000\\text { Total shareholders' equity }&1,000,000&900,000\
\text { Total liabilities and shareholders' equity }&2,095,000&1,720,000
\end{array}$
Net income for Year 2 and Year 1 was $120,000 and $460,000,respectively.No shares were issued during either year,but dividends of $20,000 and $16,000 were paid in Year 2 and Year 1,respectively.
A) What is return on common equity ratio for Year 2?

Question

Use the following selected financial data from the balance sheet at the end of Year 2 and Year 1:
 $\begin{array}{lcc}&\text { June 30, Year } 2&\text { June 30, Year } 1\
\text { Total current liabilities } & \$ 495,000 & \$ 320,000 \
\text { Bonds payable } & 600,000 & 500,000 \
\text { Common shares } & 800,000 & 800,000 \
\text { Retained earnings } & 200,000 & 100,000\\text { Total shareholders' equity }&1,000,000&900,000\
\text { Total liabilities and shareholders' equity }&2,095,000&1,720,000
\end{array}$ 
Net income for Year 2 and Year 1 was $120,000 and $460,000,respectively.No shares were issued during either year,but dividends of $20,000 and $16,000 were paid in Year 2 and Year 1,respectively.
 A) What is return on common equity ratio for Year 2?

Quizplus · Accepted Answer

The Answer of Use the following selected financial data from the balance sheet at the end of Year 2 and Year 1:
 $\begin{array}{lcc}&\text { June 30, Year } 2&\text { June 30, Year } 1\
\text { Total current liabilities } & \$ 495,000 & \$ 320,000 \
\text { Bonds payable } & 600,000 & 500,000 \
\text { Common shares } & 800,000 & 800,000 \
\text { Retained earnings } & 200,000 & 100,000\\text { Total shareholders' equity }&1,000,000&900,000\
\text { Total liabilities and shareholders' equity }&2,095,000&1,720,000
\end{array}$ 
Net income for Year 2 and Year 1 was $120,000 and $460,000,respectively.No shares were issued during either year,but dividends of $20,000 and $16,000 were paid in Year 2 and Year 1,respectively.
 A) What is return on common equity ratio for Year 2?

Use the Following Selected Financial Data from the Balance Sheet