Chapter 14 & Prologue Graded Homework* i 8 00 0.8 points Skipped 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 500,000 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 $25. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) Assets eBook Current assets: This Year Last Year $ $ Cash 1,230 1,390 Hint Accounts receivable, net 9,400 7,900 Inventory Prepaid expenses 13,000 12,200 640 600 Total current assets 24,270 22,090 Print Property and equipment: Land 9,600 9,600 Buildings and equipment, net 42,800 37,500 References Total property and equipment 52,400 47,100 $ Total assets 76,670 69,190 Liabilities and Stockholders' Equity Current liabilities: $ Accounts payable 18,800 17,800 Accrued liabilities 1,030 Notes payable, short term 0 800 210 Total current liabilities 19,830 18,810 Long-term liabilities: Bonds payable Total liabilities 9,000 9,000 28,830 27,810 Stockholders' equity: Common stock 2,000 2,000 Additional paid-in capital 4,000 4,000 Total paid-in capital 6,000 6,000 Retained earnings 41,840 35,380 Total stockholders' equity 47,840 41,380 $ Total liabilities and stockholders' equity 76,670 69,190 Mc Graw Hill Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 70,000 $ 65,000 Cost of goods sold 40,000 39,000 Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings Required: Compute the following financial ratios for this year: 1. Times interest earned ratio. 30,000 26,000 10,800 10,300 7,200 6,900 18,000 17,200 12,000 8,800 900 900 11,100 7,900 4,440 3,160 6,660 4,740 200 500 6,460 35,380 4,240 31,140 $ 41,840 $ 35,380 2. Debt-to-equity ratio. Saved Help Save & Exit < Prev 8 of 10 Next > Submit Check my work