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#3 Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new

#3

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 bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the companys common stock at the end of the year was $22. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash $ 1,120 $ 1,370
Accounts receivable, net 9,600 6,700
Inventory 13,900 10,800
Prepaid expenses 740 680
Total current assets 25,360 19,550
Property and equipment:
Land 10,300 10,300
Buildings and equipment, net 40,009 38,764
Total property and equipment 50,309 49,064
Total assets $ 75,669 $ 68,614
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 20,300 $ 18,700
Accrued liabilities 910 750
Notes payable, short term 220 220
Total current liabilities 21,430 19,670
Long-term liabilities:
Bonds payable 8,600 8,600
Total liabilities 30,030 28,270
Stockholders' equity:
Common stock 600 600
Additional paid-in capital 4,000 4,000
Total paid-in capital 4,600 4,600
Retained earnings 41,039 35,744
Total stockholders' equity 45,639 40,344
Total liabilities and stockholders' equity $ 75,669 $ 68,614

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year Last Year
Sales $ 69,275 $ 65,000
Cost of goods sold 41,990 40,000
Gross margin 27,285 25,000
Selling and administrative expenses:
Selling expenses 10,600 10,000
Administrative expenses 6,600 6,400
Total selling and administrative expenses 17,200 16,400
Net operating income 10,085 8,600
Interest expense 860 860
Net income before taxes 9,225 7,740
Income taxes 3,690 3,096
Net income 5,535 4,644
Dividends to common stockholders 240 240
Net income added to retained earnings 5,295 4,404
Beginning retained earnings 35,744 31,340
Ending retained earnings $ 41,039 $ 35,744

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.)

6.

Total asset turnover. (Round your answer to 2 decimal places.)

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