Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the end of the year was $30. All of the company’s sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) |
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This Year | Last Year | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 1,190 | $ | 1,250 | ||
Accounts receivable, net | 9,700 | 8,200 | ||||
Inventory | 13,900 | 12,100 | ||||
Prepaid expenses | 680 | 650 | ||||
Total current assets | 25,470 | 22,200 | ||||
Property and equipment: | ||||||
Land | 10,500 | 10,500 | ||||
Buildings and equipment, net | 42,630 | 40,370 | ||||
Total property and equipment | 53,130 | 50,870 | ||||
Total assets | $ | 78,600 | $ | 73,070 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 19,200 | $ | 18,400 | ||
Accrued liabilities | 970 | 890 | ||||
Notes payable, short term | 190 | 190 | ||||
Total current liabilities | 20,360 | 19,480 | ||||
Long-term liabilities: | ||||||
Bonds payable | 9,500 | 9,500 | ||||
Total liabilities | 29,860 | 28,980 | ||||
Stockholders' equity: | ||||||
Common stock | 600 | 600 | ||||
Additional paid-in capital | 4,000 | 4,000 | ||||
Total paid-in capital | 4,600 | 4,600 | ||||
Retained earnings | 44,140 | 39,490 | ||||
Total stockholders' equity | 48,740 | 44,090 | ||||
Total liabilities and stockholders' equity | $ | 78,600 | $ | 73,070 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) |
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This Year | Last Year | |||||
Sales | $ | 67,000 | $ | 65,000 | ||
Cost of goods sold | 40,000 | 32,000 | ||||
Gross margin | 27,000 | 33,000 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 11,100 | 10,900 | ||||
Administrative expenses | 6,700 | 6,400 | ||||
Total selling and administrative expenses | 17,800 | 17,300 | ||||
Net operating income | 9,200 | 15,700 | ||||
Interest expense | 950 | 950 | ||||
Net income before taxes | 8,250 | 14,750 | ||||
Income taxes | 3,300 | 5,900 | ||||
Net income | 4,950 | 8,850 | ||||
Dividends to common stockholders | 300 | 300 | ||||
Net income added to retained earnings | 4,650 | 8,550 | ||||
Beginning retained earnings | 39,490 | 30,940 | ||||
Ending retained earnings | $ | 44,140 | $ | 39,490 | ||
Required:
Compute the following financial data and ratios for this year:
1. Working capital. (Enter answer in thousands.)
2. Current ratio. (Round your answer to 2 decimal places.)
3. Acid-test ratio. (Round your answer to 2 decimal places.)
Ans. 1 | Working capital = Total current assets - Total current liabilities | |||
$25,470 - $20,360 | ||||
$5,110 | ||||
Ans. 2 | Current ratio = Total current assets / Total current liabilities | |||
$25,470 / $20,360 | ||||
1.25 : 1 | ||||
Ans. 3 | Acid test ratio = (Total current assets - Inventory - Prepaid expenses) / Total current liabilities | |||
($25,470 - $13,900 - $680) / $20,360 | ||||
$10,890 / $20,360 | ||||
0.53 : 1 |
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 700,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company's common stock...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 800,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 800,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company's common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 700,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the company’s common stock at the...
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value...