The Following Financial Statement Information Is Available for Penn Corporation

question 106

Multiple Choice

The following financial statement information is available for Penn Corporation: $\begin{array}{lrr}&2017&2016\\\text { Stockholders' equity - common } & \$ 350,000 & \$ 270,000 \\\text { Net sales } & 784,000 & 697,000 \\\text { Cost of goods sold } & 406,000 & 377,000 \\\text { Net income } & 115,000 & 80,000 \\\text { Inc tax expense } & 48,000 & 29,000 \\\text { Interest expense } & 14,000 & 14,000 \\\text { Dividends paid to preferred } & & \\\quad \text { stockholders } & 24,000 & 20,000 \\\text { Dividends paid to common } & & \\\quad \text { stockholders } & 15,000 & 10,000\end{array}$ The return on common stockholders' equity for 2017 is

• A)21.7%.
• B)32.9%.
• C)28.6%.
• D)29.4%.

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Definitions:

Infringement

The action of violating a law, agreement, or the rights of another, especially intellectual property rights.

Legal Costs

Expenses incurred due to legal services, which may include lawyer fees, court fees, and other related costs.

Remaining Economic Life

The estimated remaining period during which an asset is expected to be economically usable, with its cost being recoverable.

International Accounting Standards

A set of accounting standards, issued by the International Accounting Standards Board (IASB), that aim to standardize accounting practices across the globe.