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 600,000 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 $27. 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 $ 1,080 $ 1,350 Accounts receivable, net 9,500 7,700 Inventory 13,500 11,900 Prepaid expenses 600 670 Total current assets 24,680 21,620 Property and equipment: Land 9,700 9,700 Buildings and equipment, net 43,778 42,994 Total property and equipment 53,478 52,694 Total assets $ 78,158 $ 74,314 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 18,600 $ 18,700 Accrued liabilities 1,020 820 Notes payable, short term 290 290 Total current liabilities 19,910 19,810 Long-term liabilities: Bonds payable 9,600 9,600 Total liabilities 29,510 29,410 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 44,048 40,304 Total stockholders' equity 48,648 44,904 Total liabilities and stockholders' equity $ 78,158 $ 74,314 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 73,960 $ 65,000 Cost of goods sold 48,260 32,000 Gross margin 25,700 33,000 Selling and administrative expenses: Selling expenses 11,000 10,600 Administrative expenses 7,100 6,000 Total selling and administrative expenses 18,100 16,600 Net operating income 7,600 16,400 Interest expense 960 960 Net income before taxes 6,640 15,440 Income taxes 2,656 6,176 Net income 3,984 9,264 Dividends to common stockholders 240 300 Net income added to retained earnings 3,744 8,964 Beginning retained earnings 40,304 31,340 Ending retained earnings $ 44,048 $ 40,304 Required: Compute the following financial data for this year: 4. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.)

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 600,000 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 $27. 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 $ 1,080 $ 1,350 Accounts receivable, net 9,500 7,700 Inventory 13,500 11,900 Prepaid expenses 600 670 Total current assets 24,680 21,620 Property and equipment: Land 9,700 9,700 Buildings and equipment, net 43,778 42,994 Total property and equipment 53,478 52,694 Total assets $ 78,158 $ 74,314 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 18,600 $ 18,700 Accrued liabilities 1,020 820 Notes payable, short term 290 290 Total current liabilities 19,910 19,810 Long-term liabilities: Bonds payable 9,600 9,600 Total liabilities 29,510 29,410 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 44,048 40,304 Total stockholders' equity 48,648 44,904 Total liabilities and stockholders' equity $ 78,158 $ 74,314 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 73,960 $ 65,000 Cost of goods sold 48,260 32,000 Gross margin 25,700 33,000 Selling and administrative expenses: Selling expenses 11,000 10,600 Administrative expenses 7,100 6,000 Total selling and administrative expenses 18,100 16,600 Net operating income 7,600 16,400 Interest expense 960 960 Net income before taxes 6,640 15,440 Income taxes 2,656 6,176 Net income 3,984 9,264 Dividends to common stockholders 240 300 Net income added to retained earnings 3,744 8,964 Beginning retained earnings 40,304 31,340 Ending retained earnings $ 44,048 $ 40,304 Required: Compute the following financial data for this year: 4. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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Question

	This Year	Last Year
Weller Corporation Comparative Balance Sheet (dollars in thousands)
Assets
Current assets:
Cash	$ 1,080	$ 1,350
Accounts receivable, net	9,500	7,700
Inventory	13,500	11,900
Prepaid expenses	600	670
Total current assets	24,680	21,620
Property and equipment:
Land	9,700	9,700
Buildings and equipment, net	43,778	42,994
Total property and equipment	53,478	52,694
Total assets	$ 78,158	$ 74,314
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 18,600	$ 18,700
Accrued liabilities	1,020	820
Notes payable, short term	290	290
Total current liabilities	19,910	19,810
Long-term liabilities:
Bonds payable	9,600	9,600
Total liabilities	29,510	29,410
Stockholders' equity:
Common stock	600	600
Additional paid-in capital	4,000	4,000
Total paid-in capital	4,600	4,600
Retained earnings	44,048	40,304
Total stockholders' equity	48,648	44,904
Total liabilities and stockholders' equity	$ 78,158	$ 74,314

	This Year	Last Year
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
Sales	$ 73,960	$ 65,000
Cost of goods sold	48,260	32,000
Gross margin	25,700	33,000
Selling and administrative expenses:
Selling expenses	11,000	10,600
Administrative expenses	7,100	6,000
Total selling and administrative expenses	18,100	16,600
Net operating income	7,600	16,400
Interest expense	960	960
Net income before taxes	6,640	15,440
Income taxes	2,656	6,176
Net income	3,984	9,264
Dividends to common stockholders	240	300
Net income added to retained earnings	3,744	8,964
Beginning retained earnings	40,304	31,340
Ending retained earnings	$ 44,048	$ 40,304