Selected financial data for Wilmington Corporation is presen…
Selected financial data for Wilmington Corporation is presented below. Wilmington Corporation Balance Sheet As of December 31 Year 7 Year 6 Current Assets Cash and cash equivalents $ 634,527 $ 335,597 Marketable securities 166,106 187,064 Accounts receivable (net) 284,226 318,010 Inventories 466,942 430,249 Prepaid expenses 60,906 28,060 Other current assets 83,053 85,029 Total Current Assets 1,695,760 1,384,009 Property, plant and equipment 1,384,217 625,421 Long-term investment 568,003 425,000 Total Assets $3,647,980 $2,434,430 Current Liabilities Short-term borrowings $ 306,376 $ 170,419 Current portion of long-term debt 155,000 168,000 Accounts payable 279,522 314,883 Accrued liabilities 301,024 183,681 Income taxes payable 107,509 196,802 Total Current Liabilities 1,149,431 1,033,785 Long-term debt 500,000 300,000 Deferred income taxes 236,519 288,644 Total Liabilities $1,885,950 $1,622,429 Common stock $ 425,250 $ 125,000 Additional paid-in capital 356,450 344,335 Retained earnings 980,330 342,666 Total Stockholders’ Equity 1,762,030 812,001 Total Liabilities and Stockholders’ Equity $3,647,980 $2,434,430 Continued next page Selected financial data for Wilmington Corporation continued: Selected Income Statement Data for the year ending December 31, Year 7: Net sales $4,885,340 Cost of goods sold (2,906,526) Selling expenses (884,685) Operating income 1,094,129 Interest expense (55,240) Earnings before income taxes 1,038,889 Income tax expense (401,225) Net income $ 637,664 Selected Statement of Cash Flow Data for the year ending December 31, Year 7: Cash flows from operations $1,601,692 Capital expenditures $745,862 For Year 7, what was the Company’s a) Return on Equity b) Times Interest Earned for Year7 Please label your answers a) and b) and show work for partial credit on incorrect answers.