Question
Comparative financial statements for Homelander Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common
Comparative financial statements for Homelander 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 700,000 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 the year was $28. All of the companys sales are on account.
Homelander Corporation Comparative Balance Sheet (dollars in thousands) | ||||||
This Year | Last Year | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 1,130 | $ | 1,400 | ||
Accounts receivable, net | 10,600 | 7,200 | ||||
Inventory | 13,600 | 10,600 | ||||
Prepaid expenses | 610 | 520 | ||||
Total current assets | 25,940 | 19,720 | ||||
Property and equipment: | ||||||
Land | 9,900 | 9,900 | ||||
Buildings and equipment, net | 48,604 | 43,000 | ||||
Total property and equipment | 58,504 | 52,900 | ||||
Total assets | $ | 84,444 | $ | 72,620 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 19,300 | $ | 18,900 | ||
Accrued liabilities | 1,070 | 730 | ||||
Notes payable, short term | 120 | 120 | ||||
Total current liabilities | 20,490 | 19,750 | ||||
Long-term liabilities: | ||||||
Bonds payable | 9,000 | 9,000 | ||||
Total liabilities | 29,490 | 28,750 | ||||
Stockholders' equity: | ||||||
Common stock | 700 | 700 | ||||
Additional paid-in capital | 4,000 | 4,000 | ||||
Total paid-in capital | 4,700 | 4,700 | ||||
Retained earnings | 50,254 | 39,170 | ||||
Total stockholders' equity | 54,954 | 43,870 | ||||
Total liabilities and stockholders' equity | $ | 84,444 | $ | 72,620 | ||
Homelander Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||||||
This Year | Last Year | |||||
Sales | $ | 75,650 | $ | 65,000 | ||
Cost of goods sold | 37,510 | 32,000 | ||||
Gross margin | 38,140 | 33,000 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 11,200 | 10,900 | ||||
Administrative expenses | 7,100 | 6,400 | ||||
Total selling and administrative expenses | 18,300 | 17,300 | ||||
Net operating income | 19,840 | 15,700 | ||||
Interest expense | 900 | 900 | ||||
Net income before taxes | 18,940 | 14,800 | ||||
Income taxes | 7,576 | 5,920 | ||||
Net income | 11,364 | 8,880 | ||||
Dividends to common stockholders | 280 | 350 | ||||
Net income added to retained earnings | 11,084 | 8,530 | ||||
Beginning retained earnings | 39,170 | 30,640 | ||||
Ending retained earnings | $ | 50,254 | $ | 39,170 | ||
Compute the following financial data for this year:
1. Accounts receivable turnover days 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle days days 6. Total asset turnoverStep by Step Solution
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