ACC 280 / XACC 280
Axia College of University of Phoenix (UoP)
Principles of Accounting
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.
ACC 280 / XACC 280 Solution
Help in ACC 280
Help in XACC 280
Exercise 15-9 (E15-9) The income statement for Christensen, Inc., appears below.
CHRISTENSEN, INC.
Income Statement
For the Year Ended December 31, 2008
Sales $400,000
Cost of goods sold 230,000
Gross profit 170,000
Expenses (including $16,000 interest and $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.
Instructions
Compute the following ratios for 2008.
(a) Earnings per share.
(b) Price-earnings.
(c) Payout.
(d) Times interest earned.
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