The Balance Sheet for Appalachian Corporation at the End of the Current

question 166

Essay

The balance sheet for Appalachian Corporation at the end of the current year includes the following:
Bonds payable, 6% $5,000,000
6% Preferred stock, $100 par 1,000,000
Common stock, $10 par 2,000,000
Net income was $565,000 and income tax expense for the current year amounted to $285,000. Cash dividends paid on common stock were $200,000, and the common stock was selling for $28 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following:
(a) Number of times that bond interest was earned.
(b) Earnings per share for common stock.
(c) Price-earnings ratio.

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Definitions:

High Costs

Refers to significant expenses incurred in the production, operation, or maintenance of something, influencing pricing and profitability.

Time Limits

Predetermined periods set to complete specific tasks or objectives, often used to manage productivity and deadlines effectively.

Distributive Fairness

Pertains to a customer’s perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failure.

Compensation

The payment or benefits received by employees in exchange for their work or services, which can include salary, wages, benefits, and bonuses.