Sarasota Company manufactures backpacks. During 2025, Sarasota issued bonds at 10% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Sarasota Company for the years 2025 and 2024. 2025 2024 Sales revenue Net income $9,300,000 $9,300,000 2,458,500 2,646,000 Interest expense 520,000 152,000 Tax expense 921,500 1,017,200 Dividends paid on common stock 958,815 1,111,320 Dividends paid on preferred stock 390,000 390,000 Total assets (year-end) 15,500,000 17,500,000 Average total assets 16,500,000 18,375,000 Total liabilities (year-end) 6,479,000 3,132,500 Avg. total common stockholders' equity 23,500,000 35,250,000 (a) Use the information above to calculate the following ratios for both years: (Round answers to 1 decimal place, e.g. 12.5 or 12.5%.) 2025 % (1) Return on assets Return on common (2) % stockholders' equity (3) Payout ratio (4) Debt to assets ratio % (5) Times interest earned times eTextbook and Media 2024 % % % % % times

Sarasota Company manufactures backpacks. During 2025, Sarasota issued bonds at 10% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Sarasota Company for the years 2025 and 2024. 2025 2024 Sales revenue Net income $9,300,000 $9,300,000 2,458,500 2,646,000 Interest expense 520,000 152,000 Tax expense 921,500 1,017,200 Dividends paid on common stock 958,815 1,111,320 Dividends paid on preferred stock 390,000 390,000 Total assets (year-end) 15,500,000 17,500,000 Average total assets 16,500,000 18,375,000 Total liabilities (year-end) 6,479,000 3,132,500 Avg. total common stockholders' equity 23,500,000 35,250,000 (a) Use the information above to calculate the following ratios for both years: (Round answers to 1 decimal place, e.g. 12.5 or 12.5%.) 2025 % (1) Return on assets Return on common (2) % stockholders' equity (3) Payout ratio (4) Debt to assets ratio % (5) Times interest earned times eTextbook and Media 2024 % % % % % times

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 6PB

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