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The Following Information Pertains to Sampson Company What Is the Return on Common Stockholders' Equity for Sampson

question 88

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The following information pertains to Sampson Company.Assume that all balance sheet amounts represent both average and ending balance figures.Assume that all sales were on credit.  Assets  Cash and short-term investments $45,000 Accounts receivable (net)  25,000 Inventory 20,000 Property, plant and equipment 230,000 Total Assets $320,000 Liabilities and Stockholders’ Equity  Current liabilities $50,000 Long-term liabilities 90,000 Stockholders’ equity-common 180,000 Total Liabilities and Stockholders’ Equity $320,000 Income Statement  Sales $150,000 Cost of goods sold 66,000 Gross profit 84,000 Operating expenses 30,000 Net income $54,000 Number of shares of common stock 6,000 Market price of common stock $20 Dividends per share 50\begin{array}{lr}\text { Assets }\\\text { Cash and short-term investments } & \$ 45,000 \\\text { Accounts receivable (net) } & 25,000 \\\text { Inventory } & 20,000 \\\text { Property, plant and equipment } & {230,000} \\\quad \text { Total Assets } & \$320,000\\\\\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } & \$ 50,000 \\\text { Long-term liabilities } & 90,000 \\\text { Stockholders' equity-common } &180,000 \\\text { Total Liabilities and Stockholders' Equity }&\$320,000\\\\\text { Income Statement }\\\text { Sales } & \$ 150,000 \\\text { Cost of goods sold } & 66,000 \\\text { Gross profit } & 84,000 \\\text { Operating expenses } & 30,000 \\\text { Net income }&\$54,000\\\\\text { Number of shares of common stock } & 6,000 \\\text { Market price of common stock } & \$ 20 \\\text { Dividends per share } & 50\end{array} What is the return on common stockholders' equity for Sampson?

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Definitions:

T-account

A ledger account representation that outlines the debits and credits for specific transactions, helping accountants visualize the effects on each account.

Insurance Cost

The expense incurred from purchasing insurance to protect against risks.

Work in Process

Inventory that is in the production process but is not yet completed. Also known as work in progress.

Job-order Costing System

An accounting system that accumulates costs per individual job or project to calculate profitability and costs.

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