Ramirez Corp. Balance Sheet December 31, 2018
Assets
Equities
Cash
$ 300,000
Accounts payable
$ 630,000
Accounts receivable (net)
1,950,000
Income taxes payable
189,000
Inventories
2,439,000
Miscellaneous accrued payables
225,000
Bonds payable (8%, due 2020)
1,875,000
Plant and equipment,
net of depreciation
1,983,000
Patents
261,000
Preferred stock ($100 par, 6%
cumulative nonparticipating)
750,000
Other intangible assets
75,000
Common stock (no par, 60,000
shares authorized, issued and
outstanding)
1,125,000
Total Assets
7,008,000
Retained Earnings
2,439,000
Treasury stockâ1,500 shares of
preferred
(225,000)
Total Equities
7,008,000
Ramirez Corp. Income Statement
Year Ended December 31, 2018
Net sales
$ 9,000,000
Cost of goods sold
6,000,000
Gross profit
3,000,000
Operating expenses (including bond interest expense)
1,500,000
Income before income taxes
1,500,000
Income tax
450,000
Net income
S 1,050,000
Additional information:
There are no preferred dividends in arrears, the balances in the Accounts Receivable and Inventory accounts are unchanged from January 1, 2018, and there were no changes in the Bonds Payable, Preferred Stock, or Common Stock accounts during 2018. Assume that preferred dividends for the current year have not been declared.
At December 31, 2018, the current ratio was
a. 2,250 / 630.
b. 6,675 / 819.
c. 4,689 / 819.
d. 4,689 / 1,044
The number of times interest was earned during 2018 was
a. 1,50 / 150.
b. 1,500 / 150.
c. 1,650 / 150.
d. 1,350 / 150.
At December 31, 2018, the book value per share of common stock was
a. $55.66.
b. $58.16.
c. $59.40.
d. $58.65.
The rate of return for 2018 based on the year-end common stockholders' equity was
a. 1,050 / 3,519.
b. 1,050 / 3,564.
c. 1,005 / 3,519.
d. 1,005 / 3,564.