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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 700,000 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 $24. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) 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 This Year Last Year $ 1,200 10,600 12,200 660 $ 1,280 6,600 12,200 600 24,660 20,680 9,200 9,200 45,209 43,977 54,409 53,177 $ 79,069 $ 73,857 $ 19,100 1,010 $ 19,200 740 0 20,110 270 20,210 9,800 9,800 29,910 30,010 2,000 2,000 4,000 4,000 Total paid-in capital 6,000 6,000 Retained earnings 43,159 37,847 Total stockholders' equity 49,159 43,847 Total liabilities and stockholders' equity $ 79,069 $ 73,857 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 70,000 $ 66,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes 42,000 36,000 28,000 30,000 11,000 10,400 6,700 6,900 17,700 17,300 10,300 12,700 980 980 9,320 11,720 3,728 4,688 Net income Dividends to common stockholders 5,592 7,032 280 525 Net income added to retained earnings Beginning retained earnings 5,312 37,847 6,507 31,340 Ending retained earnings $ 43,159 $ 37,847 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. Note: For all requirements, round your answers to 2 decimal places. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier

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 700,000 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 $24. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) 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 This Year Last Year $ 1,200 10,600 12,200 660 $ 1,280 6,600 12,200 600 24,660 20,680 9,200 9,200 45,209 43,977 54,409 53,177 $ 79,069 $ 73,857 $ 19,100 1,010 $ 19,200 740 0 20,110 270 20,210 9,800 9,800 29,910 30,010 2,000 2,000 4,000 4,000 Total paid-in capital 6,000 6,000 Retained earnings 43,159 37,847 Total stockholders' equity 49,159 43,847 Total liabilities and stockholders' equity $ 79,069 $ 73,857 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 70,000 $ 66,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes 42,000 36,000 28,000 30,000 11,000 10,400 6,700 6,900 17,700 17,300 10,300 12,700 980 980 9,320 11,720 3,728 4,688 Net income Dividends to common stockholders 5,592 7,032 280 525 Net income added to retained earnings Beginning retained earnings 5,312 37,847 6,507 31,340 Ending retained earnings $ 43,159 $ 37,847 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. Note: For all requirements, round your answers to 2 decimal places. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter13: Earnings Per Share (eps)
Section: Chapter Questions
Problem 2R: Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of 100 par value, 8%...
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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 700,000 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 $24. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) 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 This Year Last Year $ 1,200 10,600 12,200 660 $ 1,280 6,600 12,200 600 24,660 20,680 9,200 9,200 45,209 43,977 54,409 53,177 $ 79,069 $ 73,857 $ 19,100 1,010 $ 19,200 740 0 20,110 270 20,210 9,800 9,800 29,910 30,010 2,000 2,000 4,000 4,000 Total paid-in capital 6,000 6,000 Retained earnings 43,159 37,847 Total stockholders' equity 49,159 43,847 Total liabilities and stockholders' equity $ 79,069 $ 73,857 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 70,000 $ 66,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes 42,000 36,000 28,000 30,000 11,000 10,400 6,700 6,900 17,700 17,300 10,300 12,700 980 980 9,320 11,720 3,728 4,688 Net income Dividends to common stockholders 5,592 7,032 280 525 Net income added to retained earnings Beginning retained earnings 5,312 37,847 6,507 31,340 Ending retained earnings $ 43,159 $ 37,847 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. Note: For all requirements, round your answers to 2 decimal places. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier
Transcribed Image Text: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 700,000 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 $24. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) 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 This Year Last Year $ 1,200 10,600 12,200 660 $ 1,280 6,600 12,200 600 24,660 20,680 9,200 9,200 45,209 43,977 54,409 53,177 $ 79,069 $ 73,857 $ 19,100 1,010 $ 19,200 740 0 20,110 270 20,210 9,800 9,800 29,910 30,010 2,000 2,000 4,000 4,000 Total paid-in capital 6,000 6,000 Retained earnings 43,159 37,847 Total stockholders' equity 49,159 43,847 Total liabilities and stockholders' equity $ 79,069 $ 73,857 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 70,000 $ 66,000 Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes 42,000 36,000 28,000 30,000 11,000 10,400 6,700 6,900 17,700 17,300 10,300 12,700 980 980 9,320 11,720 3,728 4,688 Net income Dividends to common stockholders 5,592 7,032 280 525 Net income added to retained earnings Beginning retained earnings 5,312 37,847 6,507 31,340 Ending retained earnings $ 43,159 $ 37,847 Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. Note: For all requirements, round your answers to 2 decimal places. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier
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