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Somerville Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1.979,155 Net income 915.197 $2.894.352 Toeal Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2612465 Somerville Company Comparative Balance Sheets At December31, 20X1 and 20X2 20X1 20X2 Assets Currene assets: Cash $2,875,000 $2.580,000 Marketable securities 800,000 700,000 Accounts receivable (ner) 939,776 690,000 Iaventories 490,000 260,000 Ocher 93,000 74,261 Total current assets $5.197.776 $4.304,261 Property and equipment: Land $1,575,000 $1,067.315 Building and equipment (net) Total long-term assets 1,348,800 $2,923,800 S8,121,576 1,150,000 $2.217.315 Total assets $6.521,576 Liabilities and Stockholders Equity Currene liabilities: Notes payable, short term Accounts payable Carrent maturity of long-term debt Accrued payables $1,170,127 $ $43,641 298,484 101,500 3,000 2,000 200,000 $1,671,611 57.780 $ 704,921 Total current liabilities Long-term liabilities: Bonds payable, 10% 500,000 S00.000 Total liabilities $2,171,611 $1,204,921 Stockholders equity: Preferred stock, $25 par, 8% Common stock, $1.50 par Additional paid-in capital" Retained camings Total stockholders equity Total liabilities and stockholders' equity $1,000,000 $1,000,000 337.500 337.500 2,000,000 2,000,000 2,612,465 1,979,155 $5,949.965 $5.316,655 $8,121,576 $6.521,576 "For comman stack only.

Somerville Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1.979,155 Net income 915.197 $2.894.352 Toeal Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2612465 Somerville Company Comparative Balance Sheets At December31, 20X1 and 20X2 20X1 20X2 Assets Currene assets: Cash $2,875,000 $2.580,000 Marketable securities 800,000 700,000 Accounts receivable (ner) 939,776 690,000 Iaventories 490,000 260,000 Ocher 93,000 74,261 Total current assets $5.197.776 $4.304,261 Property and equipment: Land $1,575,000 $1,067.315 Building and equipment (net) Total long-term assets 1,348,800 $2,923,800 S8,121,576 1,150,000 $2.217.315 Total assets $6.521,576 Liabilities and Stockholders Equity Currene liabilities: Notes payable, short term Accounts payable Carrent maturity of long-term debt Accrued payables $1,170,127 $ $43,641 298,484 101,500 3,000 2,000 200,000 $1,671,611 57.780 $ 704,921 Total current liabilities Long-term liabilities: Bonds payable, 10% 500,000 S00.000 Total liabilities $2,171,611 $1,204,921 Stockholders equity: Preferred stock, $25 par, 8% Common stock, $1.50 par Additional paid-in capital" Retained camings Total stockholders equity Total liabilities and stockholders' equity $1,000,000 $1,000,000 337.500 337.500 2,000,000 2,000,000 2,612,465 1,979,155 $5,949.965 $5.316,655 $8,121,576 $6.521,576 "For comman stack only.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 20BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...
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Calculating the Average Common Stockholders’ Equity and
the Return on Stockholders’ Equity
Refer to the information for Somerville Company on the previous pages.
Required:
Note: Round answers to four decimal places.
1. Calculate the average common stockholders’ equity.
2. Calculate the return on stockholders’ equity

Somerville Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1.979,155 Net income 915.197 $2.894.352 Toeal Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2612465 Somerville Company Comparative Balance Sheets At December31, 20X1 and 20X2 20X1 20X2 Assets Currene assets: Cash $2,875,000 $2.580,000 Marketable securities 800,000 700,000 Accounts receivable (ner) 939,776 690,000 Iaventories 490,000 260,000 Ocher 93,000 74,261 Total current assets $5.197.776 $4.304,261 Property and equipment: Land $1,575,000 $1,067.315 Building and equipment (net) Total long-term assets 1,348,800 $2,923,800 S8,121,576 1,150,000 $2.217.315 Total assets $6.521,576 Liabilities and Stockholders Equity Currene liabilities: Notes payable, short term Accounts payable Carrent maturity of long-term debt Accrued payables $1,170,127 $ $43,641 298,484 101,500 3,000 2,000 200,000 $1,671,611 57.780 $ 704,921 Total current liabilities Long-term liabilities: Bonds payable, 10% 500,000 S00.000 Total liabilities $2,171,611 $1,204,921 Stockholders equity: Preferred stock, $25 par, 8% Common stock, $1.50 par Additional paid-in capital" Retained camings Total stockholders equity Total liabilities and stockholders' equity $1,000,000 $1,000,000 337.500 337.500 2,000,000 2,000,000 2,612,465 1,979,155 $5,949.965 $5.316,655 $8,121,576 $6.521,576 "For comman stack only.
Transcribed Image Text:Somerville Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1.979,155 Net income 915.197 $2.894.352 Toeal Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2612465 Somerville Company Comparative Balance Sheets At December31, 20X1 and 20X2 20X1 20X2 Assets Currene assets: Cash $2,875,000 $2.580,000 Marketable securities 800,000 700,000 Accounts receivable (ner) 939,776 690,000 Iaventories 490,000 260,000 Ocher 93,000 74,261 Total current assets $5.197.776 $4.304,261 Property and equipment: Land $1,575,000 $1,067.315 Building and equipment (net) Total long-term assets 1,348,800 $2,923,800 S8,121,576 1,150,000 $2.217.315 Total assets $6.521,576 Liabilities and Stockholders Equity Currene liabilities: Notes payable, short term Accounts payable Carrent maturity of long-term debt Accrued payables $1,170,127 $ $43,641 298,484 101,500 3,000 2,000 200,000 $1,671,611 57.780 $ 704,921 Total current liabilities Long-term liabilities: Bonds payable, 10% 500,000 S00.000 Total liabilities $2,171,611 $1,204,921 Stockholders equity: Preferred stock, $25 par, 8% Common stock, $1.50 par Additional paid-in capital" Retained camings Total stockholders equity Total liabilities and stockholders' equity $1,000,000 $1,000,000 337.500 337.500 2,000,000 2,000,000 2,612,465 1,979,155 $5,949.965 $5.316,655 $8,121,576 $6.521,576 "For comman stack only.
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