Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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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 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%. 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 $26. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets $ 1,240 9,800 12,900 $ 1,380 7,600 10,700 660 560 24,600 20,240 Property and equipment: Land 10,200 10,200 Buildings and equipment, net 46,086 38,596 Total property and equipment 56,286 48,796 Total assets $80,886 $69,036 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $18,700 $17,800 Accrued liabilities Notes payable, short term 980 160 770 160 Total current liabilities 19,840 18,730 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital 8,900 8,900 28,740 27,630 600 600 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 47,546 36,806 Total stockholders' equity 52,146 41,406 Total liabilities and stockholders' equity $80,886 $69,036 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,170 $65,000 Cost of goods sold 42,480 37,000 Gross margin 36,690 28,000 Selling and administrative expenses: Selling expenses 10,800 10,800 Administrative expenses 6,700 6,700 Total selling and administrative expenses 17,500 17,500 Net operating income 19,190 10,500 Interest expense 890 890 Net income before taxes 18,300 9,610 Income taxes 7,320 3,844 Net income 10,980 5,766 Dividends to common stockholders 240 300 Net income added to retained earnings 10,740 5,466 Beginning retained earnings 36,806 31,340 Ending retained earnings $47,546 $36,806 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 3. Inventory turnover. (Round your answer to 2 decimal places.) 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.) 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle days days days 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%. 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 $26. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets $ 1,240 9,800 12,900 $ 1,380 7,600 10,700 660 560 24,600 20,240 Property and equipment: Land 10,200 10,200 Buildings and equipment, net 46,086 38,596 Total property and equipment 56,286 48,796 Total assets $80,886 $69,036 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $18,700 $17,800 Accrued liabilities Notes payable, short term 980 160 770 160 Total current liabilities 19,840 18,730 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital 8,900 8,900 28,740 27,630 600 600 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 47,546 36,806 Total stockholders' equity 52,146 41,406 Total liabilities and stockholders' equity $80,886 $69,036 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $79,170 $65,000 Cost of goods sold 42,480 37,000 Gross margin 36,690 28,000 Selling and administrative expenses: Selling expenses 10,800 10,800 Administrative expenses 6,700 6,700 Total selling and administrative expenses 17,500 17,500 Net operating income 19,190 10,500 Interest expense 890 890 Net income before taxes 18,300 9,610 Income taxes 7,320 3,844 Net income 10,980 5,766 Dividends to common stockholders 240 300 Net income added to retained earnings 10,740 5,466 Beginning retained earnings 36,806 31,340 Ending retained earnings $47,546 $36,806 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 3. Inventory turnover. (Round your answer to 2 decimal places.) 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.) 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle days days days
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