
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Compute the following the financial data for the year.
4. Average sale period
5. Operating cycle
6. Total asset turnover

Transcribed Image Text:1. Express
one decimal place.
ment in common-size percentages. Carry computations to
Requi
Comment briefly on the changes between the two years.
2.
EXERCISE 15-2 Financial Ratios for Assessing Liquidity LO15-2
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
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 end of
this year was $18. All of the company's sales are on account.
Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
This Year
Last Year
Assets
Current assets:
Cash ....
$ 1,280
$ 1,560
Accounts receivable, net
12,300
9,100
Inventory ..
9,700
8,200
Prepaid expenses .
1,800
2,100
Total current assets ...
25,080
20,960
Property and equipment:
Land
6,000
6,000
Buildings and equipment, net
19,200
19,000
Total property and equipment ..
25,200
25,000
Total assets
$50,280
$45,960
Liabilities and Stockholders' Equity
Current liabilities:
$ 9,500
$ 8,300
Accounts payable ....
Accrued liabilities ....
600
700
300
300
Notes payable, short term
Total current liabilities ..
10,400
9,300
Long-term liabilities:
Bonds payable .....
5,000
5,000
Total liabilities ....
15,400
14,300
Stockholders' equity:
800
800
Common stock .....
Additional paid-in capital
4,200
4,200
5,000
5,000
Total paid-in capital ....
Retained earnings
29,880
26,660
34,880
31,660
Total stockholders' equity.
$50,280
$45,960
Total liabilities and stockholders' equity . . ...

Transcribed Image Text:www
Chapter 15
Comparative Income Statement and Reconciliation
(dollars in thousands)
Weller Corporation
Last Year
This Year
$74,000
$79,000
52,000
48,000
Sales..
26,000
Cost of goods sold
27,000
Gross margin
8,000
Selling and administrative expenses:
Selling expenses ...
Administrative expenses ...
8,500
12,000
11,000
20,500
19,000
Total selling and administrative expenses ..
7,000
6,500
Net operating income
600
600
Interest expense .
दाहि
5,900
6,400
Net income before taxes .. ..
Income taxes ..
2,360
2,560
Net income
3,540
3,840
Dividends to common stockholders
320
600
Net income added to retained earnings ....
Beginning retained earnings .
3,220
3,240
26,660
23,420
Ending retained earnings ..
$29,880
$26,660
aleea/
Required:
Compute the following financial data and ratios for this year:
1. Working capital.
2. Current ratio.
3. Acid-test ratio.
EXERCISE 15-3 Financial Ratios for Asset Management LO15-3
Refer to the data in Exercise 15.2 for Woll
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