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Item2

Item 2 1.25 points Item 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 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 $0.75 last year and $0.40 this year. The market value of the companys common stock at the end of this year was $24. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
	This Year			Last Year
Assets
Current assets:
Cash	$	1,220		$	1,290
Accounts receivable, net		10,800			7,800
Inventory		13,000			11,700
Prepaid expenses		770			590
Total current assets		25,790			21,380
Property and equipment:
Land		10,200			10,200
Buildings and equipment, net		49,454			38,824
Total property and equipment		59,654			49,024
Total assets	$	85,444		$	70,404
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	19,600		$	18,300
Accrued liabilities		1,040			860
Notes payable, short term		120			120
Total current liabilities		20,760			19,280
Long-term liabilities:
Bonds payable		8,100			8,100
Total liabilities		28,860			27,380
Stockholders' equity:
Common stock		600			600
Additional paid-in capital		4,000			4,000
Total paid-in capital		4,600			4,600
Retained earnings		51,984			38,424
Total stockholders' equity		56,584			43,024
Total liabilities and stockholders' equity	$	85,444		$	70,404

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year			Last Year
Sales	$	83,700		$	65,000
Cost of goods sold		41,990			34,000
Gross margin		41,710			31,000
Selling and administrative expenses:
Selling expenses		11,300			10,500
Administrative expenses		6,600			6,300
Total selling and administrative expenses		17,900			16,800
Net operating income		23,810			14,200
Interest expense		810			810
Net income before taxes		23,000			13,390
Income taxes		9,200			5,356
Net income		13,800			8,034
Dividends to common stockholders		240			450
Net income added to retained earnings		13,560			7,584
Beginning retained earnings		38,424			30,840
Ending retained earnings	$	51,984		$	38,424

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.)

days 1. Accounts receivable turnover 2. Average collection period Inventory turnover Average sale period 5. Operating cycle 6. Total asset turnover days days