The comparative financial statements of Blige Inc. are as follows. The market price of Blige...
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Accounting
The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $59 on December 31, 2014.
Blige Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
Retained earnings, January 1
$1,563,300
$1,320,300
Add net income for year
340,800
270,400
Total
$1,904,100
$1,590,700
Deduct dividends
On preferred stock
$11,200
$11,200
On common stock
16,200
16,200
Total
$27,400
$27,400
Retained earnings, December 31
$1,876,700
$1,563,300
Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014
2013
Sales
$2,509,080
$2,308,400
Sales returns and allowances
12,480
8,110
Net sales
$2,496,600
$2,300,290
Cost of goods sold
797,160
733,390
Gross profit
$1,699,440
$1,566,900
Selling expenses
$632,830
$750,390
Administrative expenses
539,080
440,700
Total operating expenses
1,171,910
1,191,090
Income from operations
$527,530
$375,810
Other income
27,770
23,990
$555,300
$399,800
Other expense (interest)
168,000
92,800
Income before income tax
$387,300
$307,000
Income tax expense
46,500
36,600
Net income
$340,800
$270,400
Blige Inc.
Comparative Balance Sheet
December 31, 2014 and 2013
Dec. 31, 2014
Dec. 31, 2013
Assets
Current assets
Cash
$617,960
$317,690
Temporary investments
935,290
526,450
Accounts receivable (net)
430,700
401,500
Inventories
321,200
248,200
Prepaid expenses
116,908
63,540
Total current assets
$2,422,058
$1,557,380
Long-term investments
217,012
-215,882
Property, plant, and equipment (net)
2,730,000
2,457,000
Total assets
$5,369,070
$3,798,498
Liabilities
Current liabilities
$712,370
$395,198
Long-term liabilities
Mortgage note payable, 8%, due 2019
$940,000
$0
Bonds payable, 8%, due 2015
1,160,000
1,160,000
Total long-term liabilities
$2,100,000
$1,160,000
Total liabilities
$2,812,370
$1,555,198
Stockholders' Equity
Preferred $0.70 stock, $20 par
$320,000
$320,000
Common stock, $10 par
360,000
360,000
Retained earnings
1,876,700
1,563,300
Total stockholders' equity
$2,556,700
$2,243,300
Total liabilities and stockholders' equity
$5,369,070
$3,798,498
Required:
Determine the following measures for 2014, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
9. Ratio of liabilities to stockholders' equity
10. Number of times interest charges are earned
11. Number of times preferred dividends are earned
12. Ratio of net sales to assets
Answer & Explanation
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