Question

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 500,000 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 $29. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,180 10,600 12,900 620 25,300 $ 1,360 7,000 10,700 510 19,570 9,300 42,308 51, 608 $76,908 9, 300 39,249 48,549 $68, 119 od Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $19,600 $18,100 880 150 19, 130 20, 710 9,600 30,310 9,600 28,730 500 4,000 4,500 42,098 46,598 $76,908 500 4,000 4,500 34,889 39,389 $68, 119

Answer 1

in thousands cash 1180 accounts receivable 10600 inventory 12900 prepaid expense 620 total current assets 25300 total current liabilities 20710 total assets 1007000 total debt (liabilities) 612000 common stock and retained earnings 395000 ANSWERS working capital current ratio Acid test ratio 4590000 1.22 0.57 current ratio is the ratio of total current assets to total current liabilities acid test ratio is the ratio of liquid current assets to total current liabilities working capital is the difference between the current assets and current liabilities .it is used to maintain the day to day activities of the business formulas current ratio= crrent assets current liabilities acid test ratio= cash +accounts receivable/current liabilities working capital = current assets - current liabilities

please note that the answer for working capital mentioned in thousands .