In 2020, Pennington Corporation had net sales of $600,000 and cost of goods sold of $360,000, Operating expenses were $153,000, and interest expense was $7,500. The corporation's tax rate is 30%. The corporation declared preferred dividends of $15,000 in 2020, and its average common stockholders equity during the year was $200,000.
Instruction
- Prepare an income statement for Pennington Corporation.
- Compute Pennington Corporation's return on common stockholders' equity 2020.
Solution
a.
Pennington Corporation
Income statement
For the Year Ended December 31, 2020.
Income statement
For the Year Ended December 31, 2020.
b.
Calculation of Pennington Corporation's return on common stockholders' equity for 2020
