Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal yearending December 31 appear below. The company did not issue any new common stock during the year. Atotal of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were soldat their face value, was 10%. The income tax rate was 40% and the dividend per share of common stockwas $1.00 last year and $0.65 this year. The market value of the company's common stock at the end ofthe year was $29. All of the company's sales are on account.Weller CorporationComparative Balance Sheet(dollars in thousands)This Year Last YearAssetsCurrent assets:$ 1,2309,20013,200$ 1,2908,.400CashAccounts receivable, netInventoryPrepaid expenses11,800690770Total current assets24,40022,180Property and equipment:Land9,10045,0139,10041,444Buildings and equipment, netTotal property and equipment54,11350,544Total assets$78,513$72,724Liabilities and Stockholders' EquityCurrent liabilities:Accounts payableAccrued liabilities$19,9001,080150$19,200730Notes payable, short term150Total current liabilities21,13020,080Long-term liabilities:Bonds payable9,6009,600Total liabilities30,73029,680Stockholders' equity:Common stock500500Additional paid-in capital4,0004,000Total paid-in capitalRetained earnings4,5004,50038,54443,283Total stockholders' equity47,78343,044Total liabilities and stockholders' equity$78,513$72,724Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands)This Year Last YearSales$69,000$64.000Cost of goods sold41,00033,000Gross margin28,00031,000Selling and administrative expenses:Selling expensesAdministrative expenses11,3007,30010,7006,000Total selling and administrative expenses18,60016,700Net operating incomeInterest expense9,40096014,3009608,4403,37613,3405,336Net income before taxesIncome taxesNet income5,0643258,004500Dividends to common stockholdersNet income added to retained earningsBeginning retained earnings4,73938,5447,50431,040Ending retained earnings$43,283$38,544 Required:Compute the following financial data and ratios for this year.1. Working capital. (Enter your answer in thousands)Working capital2. Current ratio. (Round your answer to 2 decimal places.)Current ratio3. Acid-test ratio. (Round your answer to 2 decimal places.)Acid-test ratio

1. Working capital = Current assets - Current liabilities Working capital = $24,400 - $21,130…

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 500,000 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 $1.00 last year and $0.65 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.

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 500,000 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 $1.00 last year and $0.65 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.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 21E

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