The following accounts and December 31, 2010, balances of Florida Optical Corporation are arranged in no particular order.
retained earnings- 120,000
inventory- 101,000
prop, plant, equit, ,et- 282,000
prepaod exp - 12,000
goodwill- 62,000
accured liabilites payable- 19,000
long-term note payable- 105,000
acct rec, net- 102,000
cash- 42,000
common stock- $5
100,000 shares unauthorized,
22,000 shares issued- 110,000
div payable- 3,000
paid in cap in excess pre- common- 160,000
acct pay- 34,000
prefered stock 4%, $10 par,
25,000 shares auth,
5,000 shares issued- 50,0000
Total asets dec 31,2009- 505,000
common equity dec 31,2009- 306,000
net income 2010- 43,000
interset exp 2010- 3,600
Requirements
R1. Prepare the company's classified balance sheet in account format at December 31, 2010.
R2. Compute Florida Optical's rate of return on total assets and rate of return on common stockholders' equity for the year ended December 31, 2010.
R3. Do these rates of return suggest strength or weakness? Give your reasoning.