Shull Corporation

Use the following information to answer questions 1-10.
 

Shull Corporation’s most recent balance sheet and income statement appear below:
 

Shull Corporation
Statement of Financial Position
December 31, Year 2 and Year 1
(dollars in thousands)
 

Current assets:  Year 2  Year 1
Cash……………………………………  $ 180  $ 150
Accounts Receivable………………….  200  190
Inventory………………………………  140  140
Prepaid expenses………………………  100  90
Total current assets……………………..  620  570
Plant & equipment, net…………………  780  800
Total assets……………………………..  $ 1,400  $ 1,370
 

Current liabilities:
Accounts payable……………………..  $ 110  $ 130
Accrued liabilities…………………….  80  70
Notes payable, short term……………..  60  60
Total current liabilities…………………  250  260
Bonds payable………………………….  220  240
Total liabilities…………………………  470  500
Stockholders’ equity:
Preferred stock, $100 per value, 5%.....  200  200
Common stock, $2 per value…………  400  400
Additional paid-in capital—common stock 100  100
Retained earnings……………………..  230  170
Total stockholders’ equity……………..  930  870
Total liabilities & stockholders’ equity..  $ 1,400  $ 1,370
 

Shull Corporation
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
 

Sales (all on account)………………………………………  $1,130
Cost of goods sold………………………………………….  700
Gross margin………………………………………………  430
Selling and administrative expense………………..  244
Net operating income………………………………………  186
Interest expense…………………………………………….  29
Net income before taxes…………………………………… 157
Income taxes (30%)………………………………………..  47
Net income…………………………………………………  $ 110
 

Dividends on common stock during Year 2 totaled $40 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $9.80 per share.