Problem:
The following accounts and December 31, 2010, balances of Florida Optical Corporation are arranged in no particular order.
retained earnings- 120,000
inventory- 101,000
prop, plant, equit, ,et- 282,000
prepaod exp - 12,000
goodwill- 62,000
accured liabilites payable- 19,000
long-term note payable- 105,000
acct rec, net- 102,000
cash- 42,000
common stock- $5
100,000 shares unauthorized,
22,000 shares issued- 110,000
div payable- 3,000
paid in cap in excess pre- common- 160,000
acct pay- 34,000
prefered stock 4%, $10 par,
25,000 shares auth,
5,000 shares issued- 50,0000
Total asets dec 31,2009- 505,000
common equity dec 31,2009- 306,000
net income 2010- 43,000
interset exp 2010- 3,600
Requirements
Question 1: Prepare the company's classified balance sheet in account format at December 31, 2010.
Question 2: Compute Florida Optical's rate of return on total assets and rate of return on common stockholders' equity for the year ended December 31, 2010.
Question 3: Do these rates of return suggest strength or weakness? Give your reasoning.