compute the 2007 return on stockholders rsquo equity net income xaverage stockholder 563048

Income Statement and Retained Earnings The Senger Company presents the following partial list of account balances taken from its December 31, 2007 adjusted trial balance:

Sales (net)

$124,000

Interest expense

3,700

Cost of goods sold

66,200

Operating expenses

$30,400

Common stock, $5 par

22,000

Retained earnings, 1/1/2007

45,800

The following information is also available for 2007 and is not reflected in the preceding accounts:

1. The common stock has been outstanding all year. A cash dividend of $1.28 per share was declared and paid.

2. Land was sold at a pretax gain of $6,300.

3. Division X (a component of the company) was sold at a pretax gain of $4,700. It had incurred a $9,500 pretax operating loss during 2007.

4. A tornado, which is an unusual and infrequent event in the area, caused a $5,400 pretax loss.

5. The income tax rate on all items of income is 30%.

6. The average stockholders’ equity is $90,000.

Required

1. Prepare a 2007 multiple step income statement for Senger Company.

2. Prepare a 2007 retained earnings statement.

3. Compute the 2007 return on stockholders’ equity (net income Xaverage stockholders’ equity).

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