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 980,000 shares of common stock were outstanding. The interest rate on the bond payable 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 the year was $27.00. All of the company’s sales are on account. Weller CorporationComparative Balance Sheet(dollars in thousands) This YearLast YearAssets Current assets: Cash$4,568 $5,440 Accounts receivable, net 16,200 9,150 Inventory 10,600 8,920 Prepaid expenses 1,980 2,460 Total current assets 33,348 25,970 Property and equipment: Land 7,800 7,800 Buildings and equipment, net 21,000 20,800 Total property and equipment 28,800 28,600 Total assets$62,148 $54,570 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$11,300 $9,200 Accrued liabilities 960 1,600 Notes payable, short term 480 480 Total current liabilities 12,740 11,280 Long-term liabilities: Bonds payable 8,750 8,750 Total liabilities 21,490 20,030 Stockholders' equity: Common stock 980 980 Additional paid-in capital 5,100 5,100 Total paid-in capital 6,080 6,080 Retained earnings 34,578 28,460 Total stockholders' equity 40,658 34,540 Total liabilities and stockholders' equity$62,148 $54,570 Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands) This YearLast YearSales$97,000 $92,000 Cost of goods sold 61,000 57,000 Gross margin 36,000 35,000 Selling and administrative expenses: Selling expenses 10,300 9,800 Administrative expenses 13,800 12,800 Total selling and administrative expenses 24,100 22,600 Net operating income 11,900 12,400 Interest expense 1,050 1,050 Net income before taxes 10,850 11,350 Income taxes 4,340 4,540 Net income 6,510 6,810 Dividends to common stockholders 392 784 Net income added to retained earnings 6,118 6,026 Beginning retained earnings 28,460 22,434 Ending retained earnings$34,578 $28,460 Required:Compute the following financial data for this year: 1. Earnings per share. (Round your answer to 2 decimal places.)2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)4. Dividend yield ratio. (Round your answer to 2 decimal places.)5. Book value per share. (Round your answer to 2 decimal places.) 1.Earnings per share 2.Price-earnings ratio 3.Dividend payout ratio %4.Dividend yield ratio %5.Book value per share

Answer 1. Average Common Stock Outstanding = 980,000 Earnings per share = Net Income / Average…

Answered: Comparative financial statements for…

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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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 980,000 shares of common stock were outstanding. The interest rate on the bond payable 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 the year was $27.00. 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	$	4,568	$	5,440
Accounts receivable, net		16,200		9,150
Inventory		10,600		8,920
Prepaid expenses		1,980		2,460
Total current assets		33,348		25,970
Property and equipment:
Land		7,800		7,800
Buildings and equipment, net		21,000		20,800
Total property and equipment		28,800		28,600
Total assets	$	62,148	$	54,570
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	11,300	$	9,200
Accrued liabilities		960		1,600
Notes payable, short term		480		480
Total current liabilities		12,740		11,280
Long-term liabilities:
Bonds payable		8,750		8,750
Total liabilities		21,490		20,030
Stockholders' equity:
Common stock		980		980
Additional paid-in capital		5,100		5,100
Total paid-in capital		6,080		6,080
Retained earnings		34,578		28,460
Total stockholders' equity		40,658		34,540
Total liabilities and stockholders' equity	$	62,148	$	54,570

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year	Last Year
Sales	$	97,000	$	92,000
Cost of goods sold		61,000		57,000
Gross margin		36,000		35,000
Selling and administrative expenses:
Selling expenses		10,300		9,800
Administrative expenses		13,800		12,800
Total selling and administrative expenses		24,100		22,600
Net operating income		11,900		12,400
Interest expense		1,050		1,050
Net income before taxes		10,850		11,350
Income taxes		4,340		4,540
Net income		6,510		6,810
Dividends to common stockholders		392		784
Net income added to retained earnings		6,118		6,026
Beginning retained earnings		28,460		22,434
Ending retained earnings	$	34,578	$	28,460

Required:

Compute the following financial data for this year:

1. Earnings per share. (Round your answer to 2 decimal places.)

2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

4. Dividend yield ratio. (Round your answer to 2 decimal places.)

5. Book value per share. (Round your answer to 2 decimal places.)


1.	Earnings per share
2.	Price-earnings ratio
3.	Dividend payout ratio	%
4.	Dividend yield ratio	%
5.	Book value per share

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