$()$A comparative income statement is given below for McKenzie Sales, Limited, of Toronto:

McKenzie Sales, Limited

Comparative Income Statement

This Year Last Year

Sales $ $7,380,000$ $ $5,608,800$

Cost of goods sold $4,790,0003,515,000$

Gross margin $2,590,0002,093,800$

Selling and administrative expenses:

Selling expenses $1,381,0001,072,000$

Administrative expenses $710,000614,500$

Total expenses $2,091,0001,686,500$

Net operating income $499,000407,300$

Interest expense $105,00086,000$

Net income before taxes $ $394,000$ $ $321,300$

Members of the company$$s board of directors are surprised to see that net income increased by only $$72,700$ when sales increased by $$1,771,200.$

Required:

$1.$ Express each year's income statement in common$-$size percentages. $($Round your percentage answers to $1$ decimal place $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}3).)$

$()$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 bond payable was $10\%,$ the income tax rate was $40\%,$ and the dividend per share of common stock was $$0\mathrm{.}75$ last year and $$0\mathrm{.}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$)$

This Year Last Year

Assets

Current assets:

Cash $ $1,250$ $ $1,300$

Accounts receivable, net $10,5008,200$

Inventory $12,40010,700$

Prepaid expenses $670640$

Total current assets $24,82020,840$

Property and equipment:

Land $9,4009,400$

Buildings and equipment, net $45,84439,532$

Total property and equipment $55,24448,932$

Total assets $ $80,064$ $ $69,772$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $20,300$ $ $19,200$

Accrued liabilities $1,080840$

Notes payable, short term $210210$

Total current liabilities $21,59020,250$

Long$-$term liabilities:

Bonds payable $9,3009,300$

Total liabilities $30,89029,550$

Stockholders' equity:

Common stock $600600$

Additional paid$-$in capital $4,0004,000$

Total paid$-$in capital $4,6004,600$

Retained earnings $44,57435,622$

Total stockholders' equity $49,17440,222$

Total liabilities and stockholders' equity $ $80,064$ $ $69,772$

Weller Corporation

Comparative Income Statement and Reconciliation

$($dollars in thousands$)$

This Year Last Year

Sales $ $75,000$ $ $66,000$

Cost of goods sold $40,00040,000$

Gross margin $35,00026,000$

Selling and administrative expenses:

Selling expenses $11,10010,400$

Administrative expenses $7,3006,300$

Total selling and administrative expenses $18,40016,700$

Net operating income $16,6009,300$

Interest expense $930930$

Net income before taxes $15,6708,370$

Income taxes $6,2683,348$

Net income $9,4025,022$

Dividends to common stockholders $450240$

Net income added to retained earnings $8,9524,782$

Beginning retained earnings $35,62230,840$

Ending retained earnings $ $44,574$ $ $35,622$

Required:

Compute the following financial data and ratios for this year:

$1.$ Working capital. $($Enter your answer in thousands.$)$

$2.$ Current ratio. $($Round your answer to $2$ decimal places.$)$

$3.$ Acid$-$test ratio. $($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 $$0\mathrm{.}75$ last year and $$0\mathrm{.}40$ this year. The market value of the company$$s common stock at the end of this year was $$28.$ 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 $ $1,150$ $ $1,410$

Accounts receivable, net $10,1006,900$

Inventory $12,60011,900$

Prepaid expenses $620640$

Total current assets $24,47020,850$

Property and equipment:

Land $9,5009,500$

Buildings and equipment, net $53,73541,760$

Total property and equipment $63,23551,260$

Total assets $ $87,705$ $ $72,110$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $19,900$ $ $18,100$

Accrued liabilities $1,080860$

Notes payable, short term $130130$

Total current liabilities $21,11019,090$

Long$-$term liabilities:

Bonds payable $9,0009,000$

Total liabilities $30,11028,090$

Stockholders' equity:

Common stock $600600$

Additional paid$-$in capital $4,0004,000$

Total paid$-$in capital $4,6004,600$

Retained earnings $52,99539,420$

Total stockholders' equity $57,59544,020$

Total liabilities and stockholders' equity $ $87,705$ $ $72,110$

Weller Corporation

Comparativ