Reference no: EM132949246
Question - The information on the following page was obtained from the records of Breanna Inc.:
Accounts receivable $10,900
Accumulated depreciation 51,500
Cost of goods sold 127,000
Income tax expense 9,500
Cash 61,500
Net sales 199,000
Equipment 123,000
Selling, general, and administrative expenses 31,000
Common stock (8,300 shares) 96,000
Accounts payable 10,700
Retained earnings, 1/1/19 24,700
Interest expense 5,900
Merchandise inventory 38,300
Long-term debt 38,000
Dividends declared and paid during 2019 12,800
Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year.
Required -
1. Make an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet on December 31, 2019, for Breanna Inc. Based on the financial statements you have prepared for part a, answer the questions in parts b-e.
2. What is the company's average income tax rate?
3. What is the interest rate charged on long-term debt? Assume that the year-end balance of the long-term debt is representative of the average long-term debt account balance throughout the year.
4. What is the par value per share of common stock?
5. What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?