*Pleases SHOW HOW TO SOLVE this
Shull Corporation’s most recent balance sheet and income statement appear below:
Shull corporation statement of Financial position
December 31, Year 2 and Year 1 (dollars in thousands)
Current assets………………………………Year 2…..Year 1
Cash…………………………………………$ 180……$ 150
Accounts Receivable………………………..200………190
Inventory……………………………………..140………140
Prepaid expenses……………………………100………90
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Total current assets…………………………620………570
Plant & equipment, net……………………..780………800
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Total assets……………………………….$1,400…..$1,370
Current liabilities:
Accounts payable…………………………..$ 110……$ 130
Accrued liabilities……………………………..80……….70
Notes payable, short term…………………..60……….60
=
Total current liabilities………………………250………260
Bonds payable………………………………..220………240
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Total liabilities………………………………..470………500
Stockholders’ equity:
Preferred stock, $100 par value, 5%……….200……….200
Common Stock, $2 par value………………..400………..400
Additional paid-in capital–common stock…100………..100
Retained earnings……………………………..230………..170
=
Total stockholders’ equity……………………930………..870
=
Total liabilities & stockholders equity……$1,400…….$1,370
Shull Corporation Income Statement
For the Year Ended December 31, Year 2 (Dollars in thousands)
Sales (all on account)………………..$1,130
Cost of goods sold……………………..700
=
Gross margin…………………………….430
Selling and administrative expense….244
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Net operating income…………………..186
Interest expense………………………..29
=
Net income before taxes………………157
Income taxes (30%)……………………47
=
Net income…………………………….$110
Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock total $10 thousand. The market price of common stock at the end of the year 2 was $9.80 per share.
Find the return on common stockholders’ equity