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 700,000 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 $28. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,230 10,800 13,100 650 25,780 $ 1,280 8,500 12,000 540 22,320 11,000 41,691 52,691 $78,471 11,000 34,002 45,002 $67,322 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 Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total ent 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 $19,100 930 270 20,30 $18,600 810 270 19,680 9,300 9,300 28,980 29,600 700 4,000 4,700 44,171 700 4,000 4,700 33,642 38,342 $67,322 48,871 $78,471 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $82,025 $65,000 Cost of goods sold 45,180 41,000 Gross margin 36,845 24,000 Selling and administrative expenses: Selling expenses 10,700 10,500 Administrative expenses 7,200 6,400 Total selling and administrative expenses 17,900 16,900 Net operating income 18,945 Interest expense 930 930 Net income before taxes 18,015 6,170 Income taxes Net income 3,702 Dividends to common stockholders 280 700 Net income added to retained earnings 3,002 Beginning retained earnings 30,640 Ending retained earnings $44,171 $33,642 7,100 2,468 7,206 10,809 10,529 33,642 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.) Answer is complete but not entirely correct. 1. 2. days 3. Accounts receivable turnover Average collection period Inventory turnover Average sale period Operating cycle Total asset turnover 5.45 66.97 3.60 101.39 168.36 x 1.13 4. days days 5. 6
