Financial Statements for Larned Company Appear Below:

Total Dividends During Year 2 Were

question 2

Multiple Choice

Financial statements for Larned Company appear below:



Shareholders' Equity:
$\begin{array}{|l|r|}\hline & \begin{array}{r}\text { Larned Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year 2 }\\\text { (dollars in thousands) }\end{array} \\\hline \text { Sales (All on Account) } & \$ 2930 \\\hline \text { Costs of Goods Sold } & \$ 2050 \\\hline \text { Gross Margin } & \$ 880 \\\hline \text { Operating Expenses } & \$ 350 \\\hline \text { Net Operating Income } & \$ 530 \\\hline \text { Interest Expense } & \$ 40 \\\hline \text { Net Income before Taxes } & \$ 490 \\\hline \text { Income Taxes }(30 \%) & \$ 147 \\\hline \text { Net Income } & \$ 343 \\\hline\end{array}$
Total dividends during Year 2 were $\$ 263,000$ , of which $\$ 12,000$ were for preferred shares. The market price of a common share on December 31, Year 2 was $\$ 160$ .
-Larned Company's price-earnings ratio on December 31,Year 2 was closest to which of the following?

• A) 5.88.
• B) 8.40.
• C) 8.70.
• D) 14.50.

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Definitions:

Positive Energy Balance

A state in which calorie intake exceeds calorie expenditure, resulting in weight gain.

Calories

Units of energy that measure the amount of energy supplied by food and beverages and the amount expended by the body in activities.

Aerobic Exercise

A form of physical activity that uses large muscle groups, can be maintained continuously, and is rhythmic in nature, aimed at improving oxygen consumption by the body.

Food-Borne Illness

Illnesses caused by consuming contaminated food or beverages, which can be due to bacteria, viruses, or other pathogens.