A) calculate the earnings per share (average of 425,000 shares outstanding for the year) for 2020.1. Earnings per shares-B) calculate the price/earnings ratio (market price of $48 at year-end)1. Price/ earnings ratio-C)calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020.1.Dividend payout ratio- Sunland MedicalComparative Income Statement and Statement of Retained EarningsFor the YearSales revenue (all on account)Cost of goods soldGross profitOperating expensesNet operating incomeInterest expenseNet income before taxesIncome taxes (30%)Net incomeDividends paidPreferred dividendsCommon dividendsTotal dividends paidNet income retainedRetained earnings, beginning of yearRetained earnings, end of year2020$10,177,2505,612,7004,564,5502,840,3001,724,250300,4001,423,850427,155$996,69529,500433,350462,850533,8453,660,3102019$9,613,9005,298,7004,315,2002,634,2001,681,000308,7001,372,300411,690$960,61029,550413,050442,600518,0103,142,300$4,194,155 $3,660,310 Sunland Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and incomestatement for 2019 and 2020 follow.AssetsCurrent assetsCashAccounts receivable, netInventoryOther current assetsSunland MedicalComparative Balance SheetAs of December 31Total current assetsProperty, plant, & equipment, netTotal assetsLiabilities and Stockholders' EquityCurrent liabilitiesLong-term debtTotal liabilitiesPreferred stock, $5 par valueCommon stock, $0.25 par valueRetained earningsTotal stockholders' equityTotal liabilities and stockholders' equity2020$398,0001,099,000746,000381,3502,624,3508,645,005$11,269,355$3,209,0003,702,6006,911,60058,950104,6504,194,1554,357,755$11,269,3552019$417,450776,450681,000247,0002,121,9008,440,010$10,561,910$2,846,0503,892,7006,738,75059,000103,8503,660,3103,823,160$10,561,910

The question is related to Ratio Analysis. Ratio Analysis is the relationship between two financial…

calculate the earnings per share (average of 425,000 shares outstanding for the year) for 2020. 1. Earnings per shares- B) calculate the price/earnings ratio (market price of $48 at year-end) 1. Price/ earnings ratio- C)calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. 1.Dividend payout ratio-

calculate the earnings per share (average of 425,000 shares outstanding for the year) for 2020. 1. Earnings per shares- B) calculate the price/earnings ratio (market price of $48 at year-end) 1. Price/ earnings ratio- C)calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. 1.Dividend payout ratio-

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 2MCQ

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