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 $28. 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 | $ | 1,130 | $ | 1,310 | ||
Accounts receivable, net | 10,900 | 8,000 | ||||
Inventory | 13,700 | 12,600 | ||||
Prepaid expenses | 620 | 580 | ||||
Total current assets | 26,350 | 22,490 | ||||
Property and equipment: | ||||||
Land | 9,400 | 9,400 | ||||
Buildings and equipment, net | 45,572 | 42,116 | ||||
Total property and equipment | 54,972 | 51,516 | ||||
Total assets | $ | 81,322 | $ | 74,006 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 19,300 | $ | 19,200 | ||
Accrued liabilities | 1,010 | 880 | ||||
Notes payable, short term | 160 | 160 | ||||
Total current liabilities | 20,470 | 20,240 | ||||
Long-term liabilities: | ||||||
Bonds payable | 9,900 | 9,900 | ||||
Total liabilities | 30,370 | 30,140 | ||||
Stockholders' equity: | ||||||
Common stock | 600 | 600 | ||||
Additional paid-in capital | 4,000 | 4,000 | ||||
Total paid-in capital | 4,600 | 4,600 | ||||
Retained earnings | 46,352 | 39,266 | ||||
Total stockholders' equity | 50,952 | 43,866 | ||||
Total liabilities and stockholders' equity | $ | 81,322 | $ | 74,006 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) |
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This Year | Last Year | |||||
Sales | $ | 69,000 | $ | 66,000 | ||
Cost of goods sold | 37,000 | 33,000 | ||||
Gross margin | 32,000 | 33,000 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 11,100 | 11,000 | ||||
Administrative expenses | 7,100 | 6,300 | ||||
Total selling and administrative expenses | 18,200 | 17,300 | ||||
Net operating income | 13,800 | 15,700 | ||||
Interest expense | 990 | 990 | ||||
Net income before taxes | 12,810 | 14,710 | ||||
Income taxes | 5,124 | 5,884 | ||||
Net income | 7,686 | 8,826 | ||||
Dividends to common stockholders | 600 | 600 | ||||
Net income added to retained earnings | 7,086 | 8,226 | ||||
Beginning retained earnings | 39,266 | 31,040 | ||||
Ending retained earnings | $ | 46,352 | $ | 39,266 | ||
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.)
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Weller Corporation | (dollars in thousands) | |
Current Assets | This Year | Last Year |
Cash | 1,130.00 | 1,310.00 |
Accounts Receivable, net | 10,900.00 | 8,000.00 |
Inventory | 13,700.00 | 12,600.00 |
Prepaid Expenses | 620.00 | 580.00 |
Total Current Assets | 26,350.00 | 22,490.00 |
Current Liabilities | This Year | Last Year |
Accounts payable | 19,300.00 | 19,200.00 |
Accrued liabilities | 1,010.00 | 880.00 |
Notes payable, short term | 160.00 | 160.00 |
Total Current Liabilities | 20,470.00 | 20,240.00 |
Total Current Assets | 26,350.00 | 22,490.00 |
Less: | ||
Inventory | 13,700.00 | 12,600.00 |
Prepaid Expense | 620.00 | 580.00 |
Quick Assets | 12,030.00 | 9,310.00 |
Answer 1 | This Year | Last Year |
Working capital | 5,880.00 | 2,250.00 |
Current Assets- Current Liabilities | ||
Answer 2 | ||
Current Ratio | 1.29 | 1.11 |
Current Assets/Current Liabilities | ||
Answer 3 | ||
Acid Test Ratio | 0.59 | 0.46 |
Quick Assets/Current Liabilities |
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 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 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...
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...
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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...
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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...