ACC 280 Exercise 15-9 The income statement for Christensen, Inc., appears below

ACC 280 Exercise 15-9 The income statement for Christensen, Inc., appears below

XACC 280 Exercise 15-9 The income statement for Christensen, Inc., appears below

Principles of Accounting: Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008).

Financial Accounting (6th ed.). Hoboken, NJ: Wiley.

Axia College of University of Phoenix (UoP)

                                                                                                                                           SOLUTION

Exercise 15-9 The income statement for Christensen, Inc., appears below

CHRISTENEN, INC.

Income Statement

For the Year Ended December 31, 2011

Sales $400,000

Cost of goods sold 230,000

Gross profit 170,000

Expenses ( include $16,000 interest & $24,000,income taxes) 105,000

Net income 65,000

Additional information:

1. The weighted-average common shares outstanding in 2008 were 30,000 shares.

2. The market price of Christensen. Inc. stock was $13 in 2008.

3. Cash dividends of $26,000 were paid, $ 5,000 of which were to preferred stockholders.

Compute the following ratios for 2011.

a. Earnings per share.

b. Price-earnings

c. Payout.

d. Times interest earned                                                                                              SOLUTION