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 980,000 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 company's common stock at the end of this year was $27.00. All of the company's sales are on account.

Weller Corporation

Comparative Balance Sheet

(dollars in thousands)This YearLast YearAssetsCurrent assets:Cash$4,568$5,440Accounts receivable, net16,2009,150Inventory10,6008,920Prepaid expenses1,9802,460Total current assets33,34825,970Property and equipment:Land7,8007,800Buildings and equipment, net21,00020,800Total property and equipment28,80028,600Total assets$62,148$54,570Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable$11,300$9,200Accrued liabilities9601,600Notes payable, short term480480Total current liabilities12,74011,280Long-term liabilities:Bonds payable8,7508,750Total liabilities21,49020,030Stockholders' equity:Common stock980980Additional paid-in capital5,1005,100Total paid-in capital6,0806,080Retained earnings34,57828,460Total stockholders' equity40,65834,540Total liabilities and stockholders' equity$62,148$54,570

Weller Corporation

Comparative Income Statement and Reconciliation

(dollars in thousands)This YearLast YearSales$97,000$92,000Cost of goods sold61,00057,000Gross margin36,00035,000Selling and administrative expenses:Selling expenses10,3009,800Administrative expenses13,80012,800Total selling and administrative expenses24,10022,600Net operating income11,90012,400Interest expense1,0501,050Net income before taxes10,85011,350Income taxes4,3404,540Net income6,5106,810Dividends to common stockholders392784Net income added to retained earnings6,1186,026Beginning retained earnings28,46022,434Ending retained earnings$34,578$28,460

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 finalanswer 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 with AI-Powered 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

Financial and Managerial Accounting the basis for business decisions

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

18th edition

125969240X, 978-1259692406

Students also viewed these Accounting questions

Question

1. Speak privately if possible; dont threaten.

Answered: 1 week ago