Question - The information on the following page was obtained from the records of Breanna, Inc.:
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Accounts receivable
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$10,400
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Accumulated depredation
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51,600
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Cost of goods sold
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124,000
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Income tax expense
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9,500
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Cash
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62,000
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Sales
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192,000
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Equipment
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122,000
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Selling, general, and administrative expenses
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32,000
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Common stock (8,700 shares)
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94,000
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Accounts payable
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13,300
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Retained earnings, 1/1/13
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24,000
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Interest expense
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5,600
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Merchandise inventory
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37,100
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Long-term debt
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39,000
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Dividends declared and paid during 2013
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11,400
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Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2013, and that all income statement items reflect activities that occurred during the year ended December 31, 2013. There were no changes in paid-in capital during the year.
Required:
a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2013, and a balance sheet at December 31, 2013, for Breanna, Inc. Based on the financial statements that you have prepared for part a. answer the questions in parts b-e.
b. What is the company's average income tax rate?
c. What interest rate is charged on long-term debt?
d. What is the par value share of common stock?
e. What is the company's policy (i.e. what proportion of the company's earnings are used for dividends)?