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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 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 $26. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||||||
This Year | Last Year | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 1,130 | $ | 1,260 | ||
Accounts receivable, net | 9,400 | 7,400 | ||||
Inventory | 13,800 | 11,200 | ||||
Prepaid expenses | 620 | 510 | ||||
Total current assets | 24,950 | 20,370 | ||||
Property and equipment: | ||||||
Land | 10,900 | 10,900 | ||||
Buildings and equipment, net | 43,050 | 38,894 | ||||
Total property and equipment | 53,950 | 49,794 | ||||
Total assets | $ | 78,900 | $ | 70,164 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 19,200 | $ | 17,700 | ||
Accrued liabilities | 1,100 | 800 | ||||
Notes payable, short term | 130 | 130 | ||||
Total current liabilities | 20,430 | 18,630 | ||||
Long-term liabilities: | ||||||
Bonds payable | 9,600 | 9,600 | ||||
Total liabilities | 30,030 | 28,230 | ||||
Stockholders' equity: | ||||||
Common stock | 600 | 600 | ||||
Additional paid-in capital | 4,000 | 4,000 | ||||
Total paid-in capital | 4,600 | 4,600 | ||||
Retained earnings | 44,270 | 37,334 | ||||
Total stockholders' equity | 48,870 | 41,934 | ||||
Total liabilities and stockholders' equity | $ | 78,900 | $ | 70,164 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||||||
This Year | Last Year | |||||
Sales | $ | 73,920 | $ | 65,000 | ||
Cost of goods sold | 42,500 | 35,000 | ||||
Gross margin | 31,420 | 30,000 | ||||
Selling and administrative expenses: | ||||||
Selling expenses | 11,500 | 10,600 | ||||
Administrative expenses | 7,000 | 6,700 | ||||
Total selling and administrative expenses | 18,500 | 17,300 | ||||
Net operating income | 12,920 | 12,700 | ||||
Interest expense | 960 | 960 | ||||
Net income before taxes | 11,960 | 11,740 | ||||
Income taxes | 4,784 | 4,696 | ||||
Net income | 7,176 | 7,044 | ||||
Dividends to common stockholders | 240 | 450 | ||||
Net income added to retained earnings | 6,936 | 6,594 | ||||
Beginning retained earnings | 37,334 | 30,740 | ||||
Ending retained earnings | $ | 44,270 | $ | 37,334 | ||
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.) 1. Accounts receivable turnover days 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days
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