Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 900,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, 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 $23.00. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands) This YearLast YearAssets Current assets: Cash$ 240$ 510Accounts receivable, net15,40010,250Inventory10,2008,600Prepaid expenses1,9002,300Total current assets27,74021,660Property and equipment: Land7,0007,000Buildings and equipment, net20,20020,000Total property and equipment27,20027,000Total assets$ 54,940$ 48,660Liabilities and Stockholders' Equity Current liabilities: Accounts payable$ 10,500$ 8,800Accrued liabilities8001,200Notes payable, short term400400Total current liabilities11,70010,400Long-term liabilities: Bonds payable5,0005,000Total liabilities16,70015,400Stockholders' equity: Common stock900900Additional paid-in capital4,7004,700Total paid-in capital5,6005,600Retained earnings32,64027,660Total stockholders' equity38,24033,260Total liabilities and stockholders' equity$ 54,940$ 48,660

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This YearLast YearSales$ 89,000$ 84,000Cost of goods sold57,00053,000Gross margin32,00031,000Selling and administrative expenses: Selling expenses9,5009,000Administrative expenses13,00012,000Total selling and administrative expenses22,50021,000Net operating income9,50010,000Interest expense600600Net income before taxes8,9009,400Income taxes3,5603,760Net income5,3405,640Dividends to common stockholders360720Net income added to retained earnings4,9804,920Beginning retained earnings27,66022,740Ending retained earnings$ 32,640$ 27,660

Required:

Compute the following financial data for this year:

1. Earnings per share. (Round your answer to 2 decimal places.)

2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

5. Book value per share. (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Residential Energy Audit Manual

Authors: Fairmont

1st Edition

0915586541, 978-0915586547

More Books

Students also viewed these Accounting questions

Question

Explain how labour relations practices differ around the world.

Answered: 1 week ago