Question: Comparative balance sheets for Softech Canvas Goods for 2011 and 2010 are shown below. Softech pays no dividends, and instead reinvests all earnings for future growth.
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Comparative Balance Sheets ($ in 000s)
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December 31
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2011
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2010
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Assets:
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Cash
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$ 50
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$40
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Accounts receivable
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100
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120
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Short-term investments
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50
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40
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Inventory
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200
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140
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Property, plant, and equipment (net)
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600
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550
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$1,000
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$890
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Liabilities and Shareholders' Equity:
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Current liabilities
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$240
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$210
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Bonds payable
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160
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160
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Paid-in capital
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400
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400
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Retained earnings
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200
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120
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$1,000
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$890
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Required: Determine the return on shareholders' equity for 2011.