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MaRussiya [10]
3 years ago
14

Ecker Company reports $1,750,000 of net income for 2017 and declares $245,000 of cash dividends on its preferred stock for 2017.

At the end of 2017, the company had 310,000 weighted-average shares of common stock. What amount of net income is available to common stockholders for 2017?
Business
1 answer:
stich3 [128]3 years ago
5 0

Answer:

$1,505,000

Explanation:

Net income is the earning by the business calculated by deducting all the expenses from the revenue for the period. It is the earning which is available to distribute in the stockholders of the business. The preferred dividend must be paid if there is a profit in the period. The residual amount after deducting profit is available of common shareholders.

Net Income = $1,750,000

Preferred Dividend = $245,000

Income available for Common stockholders = Net Income -  Preferred dividend

Income available for Common stockholders = $1,750,000 - $245,000

Income available for Common stockholders = $1,505,000

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Here the actual performance is compared with the standard performance and if any deviation arises then steps are taken to overcome it. Like in this example department is providing training on time management to improve performance.

6 0
3 years ago
A stock with a beta of 1.1 has an expected rate of return of 16%. If the market return this year turns out to be 10 percentage p
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Answer:

The rate of return on the stock can be best guessed to be 5%

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3 years ago
Taxes make up the<br> what income.
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6 0
3 years ago
Scott Lockhart owns and operates AAA Delivery Services. On January 1, 20Y7, Common Stock had a balance of $60,000, and Retained
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Answer:

Explanation:

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7 0
3 years ago
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below.
Margaret [11]

Answer:

Weller Corporation

Computation of the financial data for this year:

A. Earnings per share = Net Income/No. of outstanding shares

= $3,540,000/800,000

= $4.43

B. Price-earnings ratio = Market value of share / Earnings per share

= $18/$4.43

= 4.06 times

C. Dividend Payout Ratio = Dividend per share/Earnings per share

= $0.40/$4.43

= 0.09 = 9%

D. Dividend yield ratio = Dividend per share/Market price per share

= $0.40/$18

= 0.02 = 2%

E. Book value per share = Common Equity / No. of outstanding shares

= $34,880,000/800,000

= $43.60

Explanation:

a) Data and Calculations:

1. Weller Corporation Comparative Balance Sheet

(dollars in thousands)

                                                  This Year     Last Year

Assets

Current assets:

Cash                                             $ 1,280     $ 1,560

Accounts receivable, net             12,300        9,100

Inventory                                        9,700        8,200

Prepaid expenses                          1,800         2,100

Total current assets                    25,080     20,960

Long-term assets:

Property and equipment:

Land                                               6,000        6,000

Buildings and equipment, net     19,200      19,000

Total property and equipment   25,200     25,000

Total assets                              $ 50,280 $ 45,960

Liabilities and Stockholders' Equity Current liabilities:

Accounts payable                      $ 9,500    $ 8,300

Accrued liabilities                             600          700

Notes payable, short term               300          300

Total current liabilities                 10,400       9,300

Long-term liabilities:

Bonds payable                              5,000       5,000

Total liabilities                              15,400      14,300

Stockholders' equity:

Common stock                                800          800

Additional paid-in capital             4,200       4,200

Total paid-in capital                     5,000       5,000

Retained earnings                     29,880    26,660

Total stockholders' equity         34,880     31,660

Total liabilities and

stockholders' equity              $ 50,280 $ 45,960

2. Weller Corporation Comparative Income Statement

and Reconciliation (dollars in thousands)

                                                    This Year     Last Year

Sales                                            $ 79,000    $ 74,000

Cost of goods sold                        52,000       48,000

Gross margin                                  27,000       26,000

Selling and administrative expenses:

Selling expenses                              8,500        8,000

Administrative expenses               12,000        11,000

Total selling and administrative

expenses                                       20,500       19,000

Net operating income                     6,500         7,000

Interest expense                                600            600

Net income before taxes                5,900         6,400

Income taxes                                   2,360         2,560

Net income                                      3,540          3,840

Dividends to common stockholders 320            600

Net income added to  retained

earnings                                         3,220          3,240

Beginning retained earnings      26,660        23,420

Ending retained earnings        $ 29,880     $ 26,660

3. Other information:

a. Common stock, outstanding 800,000 shares

b. Interest rate on the bonds =12%.

c. Income tax rate was 40%

d. Dividend per share of common stock was $0.40

e. Market value of the company’s common stock at the end of the year was $18.

3 0
3 years ago
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