【正文】 stockholders and Bradley’s stock has a P/E of 15 times earnings per share, what is the current price of the stock? c. What is the ratio of market value per share to book value per share? Solution: Bradley Gypsum Company a. Total assets Current liabilities Longterm liabilities Stockholders39。 equity Preferred stock Net worth assigned to mon Common shares outstanding Book values ( worth) per share b. Earnings available to mon stockholders Shares outstanding Earnings per share $1,900,000 700,000 580,000 $ 620,000 170,000 $ 450,000 30,000 $ $42,000 30,000 $ $$15 P r i ces h ar ep er E ar n i n g sr at i o P / E ?? ?? c. Market value per share (price) to book value per share $$ = 220. In problem 19, if the firm sells at two times book value per share, what will the P/E ratio be? Solution: Bradley Gypsum Company (continued) Copyright 169。 2022 by The McGrawHill Companies, Inc. S21 r at i o P / $ 1 . 4 0$ 3 0 . 0 0r at i o P / Es h ar ep er E ar n i n g sP r i ce30$$2p r i ce b o o k v al u e2?????? 221. For December 31, 2022, the balance sheet of the Gardner Corporation is as follows: Current Assets Cash $ 15,000 Accounts receivable 22,500 Inventory 37,500 Prepaid expenses 18,000 Fixed Assets Plant and equipment (gross) $375,000 Less: Accumulated Depreciation 75,000 Net plant and assets 300,000 Total assets $393,000 Liabilities Accounts payable $ 20,000 Notes payable 30,000 Bonds payable 75,000 Stockholders39。 Equity Common stock $112,500 Paidincapital 37,500 Retained earnings 118,000 Total liabilities and Stockholders39。 equity $393,000 Sales for 2022 were $330,000, with cost of goods sold was 60 percent of sales. Selling and administrative expense was $33,000. Depreciation expense was 10 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 10 percent, while interest on bonds payable was 12 percent. These were based on December 31, 2022, balances. The tax rate averaged 20 percent. 221. Continued Two thousand dollars in preferred stock dividend were paid, and $4,100 in dividends were paid to mon stockholders. There were 10,000 shares of mon stock outstanding. Copyright 169。 2022 by The McGrawHill Companies, Inc. S22 During the year 2022, the cash balance and prepaid expenses balance were unchanged. Accounts receivable and inventory increased by 20 percent. A new machine was purchased on December 31, 2022, at a cost of $60,000. Accounts payable increased by 30 percent. At yearend, December 31, 2022, notes payable increased by $10,000 and bonds payable decreased by $15,000. The mon stock and paidin capital in excess of par accounts did not change. a. Prepare an ine statement for 2022. b. Prepare a statement of retained earnings for 2022. c. Prepare a balance sheet as of December 31, 2022. Solution: Gardner Corporation 2022 Ine Statement a. Sales $330,000 Cost of good sold (60% of $330,000) 198,000 Gross profit 132,000 Selling and administrative expense 33,000 Depreciation expense (10% x $375,000) 37,500 Operating profit (EBIT) 61,500 Interest expense 12,0001 Earnings before taxes 49,500 Taxes (20%) 9,900 Earnings after taxes (EAT) 39,600 Preferred stock dividends 2,000 Earnings available to mon stockholder $ 37,600 Shares outstanding 10,000 Earnings per share $ 221. Continued b. 2022 Statement of Retained Earnings Retained earnings balance, January 1, 2022 $118,000 Add: Earnings available to mon stockholders, 2022 37,600 Deduct: Cash dividend declared in 2022 4,100 Retained earnings balance, December 31, 2022 $151,500 c. 2022 Balance Sheet 1 (10% x 30,000) + (12% x $75,000) = $12,000 Copyright 169。 2022 by The McGrawHill Companies, Inc. S23 Current Assets Liabilities Cash $ 15,000 Accounts payable $26,000 Accounts receivable 27,000 Notes payable 40,000 Inventory 45,000 Bonds payable 60,000 Prepaid expenses 18,000 _______ $105,000 $126,000 221. Continued Fixed Assets Stockholders39。 Equity Gross plant $435,000 Common stock $112,500 Accumulated depreciation (112,500)2 Paid in capital in excess of par 37,500 Net plant 322,500 Retained earnings 151,500 Total assets $427,500 Total Liability amp。 Equity $427,500 222. Prepare a statement of cash flows for the Jeter Corporation. Follow the general procedures indicated in Table 210. Crosby Corporation Ine Statement For the Year Ended December 31, 2022 Sales $2,200,000 Cost of goods sold 1,300,000 Gross profits 900,000 Selling and administrative expense 420,000 Depreciation expense 150,000 Operating ine 330,000 Interest expense 90,000 Earnings before taxes 240,000 Taxes 80,000 Earnings after taxes 160,000 Preferred stock dividends 10,000 Earnings available to mon stockholders $ 150,000 Shares outstanding 120,000 Earnings per share $ 2 $75,000 + $37,500 = $112,500 Copyright 169。 2022 by The McGrawHill Companies, Inc. S24 Statement of Retained Earnings For the Year Ended December 31, 2022 Retained earnings, balance, January 1, 2022 $500,000 Add: Earnings available to mon stockholders, 2022 150,000 Deduct: Cash dividends declared and paid in 2022 50,000 Retained earnings, balance, December 31, 2022 $600,000 Continued Comparative Balance S