Question 1: Financial data of Sam's Furniture Store given below:
Sales $1.300,000
Depreciation Expense $70,000
Cost of Goods Sold $800,000
Interest Expense $30,000
Selling & Admin. Expense $140,000
Shares Outstanding 60,000
Taxes $70,000
Preferred Stock Dividend $5,000
Prepare an income statement and compute earnings per share.
Question 2. A. Low Carb Diet Supplement, Inc. has two divisions. Division A has a profit of $100,000 on sales of $2,000,000. Division B is only able to make $25,000 on sales of $300,000. Based on the profit margins (returns on sales), which division is superior?
B. Neon Light Company has $1,000,000 in assets and $600,000 of debt. It reports net income of $100,000. What is the return on assets and return on stockholder's equity?