Question
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 $28. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 1,110 | $ 1,260 |
Accounts receivable, net | 10,500 | 7,200 |
Inventory | 13,700 | 11,600 |
Prepaid expenses | 670 | 640 |
Total current assets | 25,980 | 20,700 |
Property and equipment: | ||
Land | 10,200 | 10,200 |
Buildings and equipment, net | 49,106 | 40,854 |
Total property and equipment | 59,306 | 51,054 |
Total assets | $ 85,286 | $ 71,754 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Accounts payable | $ 19,300 | $ 18,400 |
Accrued liabilities | 1,000 | 770 |
Notes payable, short term | 180 | 180 |
Total current liabilities | 20,480 | 19,350 |
Long-term liabilities: | ||
Bonds payable | 9,600 | 9,600 |
Total liabilities | 30,080 | 28,950 |
Stockholders' equity: | ||
Common stock | 600 | 600 |
Additional paid-in capital | 4,000 | 4,000 |
Total paid-in capital | 4,600 | 4,600 |
Retained earnings | 50,606 | 38,204 |
Total stockholders' equity | 55,206 | 42,804 |
Total liabilities and stockholders' equity | $ 85,286 | $ 71,754 |
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||
This Year | Last Year | |
---|---|---|
Sales | $ 77,880 | $ 64,000 |
Cost of goods sold | 37,950 | 32,000 |
Gross margin | 39,930 | 32,000 |
Selling and administrative expenses: | ||
Selling expenses | 11,400 | 10,800 |
Administrative expenses | 6,500 | 6,800 |
Total selling and administrative expenses | 17,900 | 17,600 |
Net operating income | 22,030 | 14,400 |
Interest expense | 960 | 960 |
Net income before taxes | 21,070 | 13,440 |
Income taxes | 8,428 | 5,376 |
Net income | 12,642 | 8,064 |
Dividends to common stockholders | 240 | 600 |
Net income added to retained earnings | 12,402 | 7,464 |
Beginning retained earnings | 38,204 | 30,740 |
Ending retained earnings | $ 50,606 | $ 38,204 |
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.)
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