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 this year was $23. 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 $ 1,190 $ 1,240 Accounts receivable, net 9,300 6,800 Inventory 13,600 11,200 Prepaid expenses 710 600 Total current assets 24,800 19,840 Property and equipment: Land 10,000 10,000 Buildings and equipment, net 47,103 38,484 Total property and equipment 57,103 48,484 Total assets $ 81,903 $ 68,324 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 18,500 $ 18,900 Accrued liabilities 1,040 720 Notes payable, short term 270 270 Total current liabilities 19,810 19,890 Long-term liabilities: Bonds payable 9,100 9,100 Total liabilities 28,910 28,990 Stockholders' equity: Common stock 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 48,493 34,834 Total stockholders' equity 52,993 39,334 Total liabilities and stockholders' equity $ 81,903 $ 68,324 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 76,000 $ 65,000 Cost of goods sold 34,000 40,000 Gross margin 42,000 25,000 Selling and administrative expenses: Selling expenses 10,800 10,800 Administrative expenses 6,900 6,300 Total selling and administrative expenses 17,700 17,100 Net operating income 24,300 7,900 Interest expense 910 910 Net income before taxes 23,390 6,990 Income taxes 9,356 2,796 Net income 14,034 4,194 Dividends to common stockholders 375 200 Net income added to retained earnings 13,659 3,994 Beginning retained earnings 34,834 30,840 Ending retained earnings $ 48,493 $ 34,834 Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio.

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 this year was $23. 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 $ 1,190 $ 1,240 Accounts receivable, net 9,300 6,800 Inventory 13,600 11,200 Prepaid expenses 710 600 Total current assets 24,800 19,840 Property and equipment: Land 10,000 10,000 Buildings and equipment, net 47,103 38,484 Total property and equipment 57,103 48,484 Total assets $ 81,903 $ 68,324 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 18,500 $ 18,900 Accrued liabilities 1,040 720 Notes payable, short term 270 270 Total current liabilities 19,810 19,890 Long-term liabilities: Bonds payable 9,100 9,100 Total liabilities 28,910 28,990 Stockholders' equity: Common stock 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 48,493 34,834 Total stockholders' equity 52,993 39,334 Total liabilities and stockholders' equity $ 81,903 $ 68,324 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 76,000 $ 65,000 Cost of goods sold 34,000 40,000 Gross margin 42,000 25,000 Selling and administrative expenses: Selling expenses 10,800 10,800 Administrative expenses 6,900 6,300 Total selling and administrative expenses 17,700 17,100 Net operating income 24,300 7,900 Interest expense 910 910 Net income before taxes 23,390 6,990 Income taxes 9,356 2,796 Net income 14,034 4,194 Dividends to common stockholders 375 200 Net income added to retained earnings 13,659 3,994 Beginning retained earnings 34,834 30,840 Ending retained earnings $ 48,493 $ 34,834 Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio.

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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Related questions

Question

Weller Corporation Comparative Balance Sheet (dollars in thousands)
	This Year	Last Year
Assets
Current assets:
Cash	$	1,190	$	1,240
Accounts receivable, net		9,300		6,800
Inventory		13,600		11,200
Prepaid expenses		710		600
Total current assets		24,800		19,840
Property and equipment:
Land		10,000		10,000
Buildings and equipment, net		47,103		38,484
Total property and equipment		57,103		48,484
Total assets	$	81,903	$	68,324
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	18,500	$	18,900
Accrued liabilities		1,040		720
Notes payable, short term		270		270
Total current liabilities		19,810		19,890
Long-term liabilities:
Bonds payable		9,100		9,100
Total liabilities		28,910		28,990
Stockholders' equity:
Common stock		500		500
Additional paid-in capital		4,000		4,000
Total paid-in capital		4,500		4,500
Retained earnings		48,493		34,834
Total stockholders' equity		52,993		39,334
Total liabilities and stockholders' equity	$	81,903	$	68,324

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year	Last Year
Sales	$	76,000	$	65,000
Cost of goods sold		34,000		40,000
Gross margin		42,000		25,000
Selling and administrative expenses:
Selling expenses		10,800		10,800
Administrative expenses		6,900		6,300
Total selling and administrative expenses		17,700		17,100
Net operating income		24,300		7,900
Interest expense		910		910
Net income before taxes		23,390		6,990
Income taxes		9,356		2,796
Net income		14,034		4,194
Dividends to common stockholders		375		200
Net income added to retained earnings		13,659		3,994
Beginning retained earnings		34,834		30,840
Ending retained earnings	$	48,493	$	34,834