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 $27. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity $ 1,270 10,900 13,900 720 26,790 $ 1,270 8,100 12,000 660 22,030 9,600 49,728 59,328 $ 86,118 9,600 36,523 46,123 $ 68,153 $ 20,300 1,040 130 21,470 $ 17,500 780 130 18,410 Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 9,700 31,170 9,700 28,110 500 4,000 4,500 50, 448 54,948 $ 86,118 500 4,000 4,500 35,543 40,043 $ 68,153 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 81,700 $ 66,000 Cost of goods sold 37,555 40,000 Gross margin 44, 145 26,000 Selling and administrative expenses: Selling expenses 10, 700 10,800 Administrative expenses 7,300 6,600 Total selling and administrative expenses 18,000 17,400 Net operating income 26,145 8,600 Interest expense 970 970 Net income before taxes 25,175 7,630 Income taxes 10,070 3,052 Net income 15,105 4,578 Dividends to common stockholders 200 375 Net income added to retained earnings 14,905 4,203 Beginning retained earnings 35,543 31,340 Ending retained earnings $ 50,448 $ 35,543 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 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days
