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 830,000 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 companys common stock at the end of this year was $19.50. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash $ 5,078 $ 5,190
Accounts receivable, net 12,600 9,250
Inventory 9,850 8,320
Prepaid expenses 1,830 2,160
Total current assets 29,358 24,920
Property and equipment:
Land 6,300 6,300
Buildings and equipment, net 19,500 19,300
Total property and equipment 25,800 25,600
Total assets $ 55,158 $ 50,520
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,800 $ 8,450
Accrued liabilities 660 850
Notes payable, short term 330 330
Total current liabilities 10,790 9,630
Long-term liabilities:
Bonds payable 8,750 8,750
Total liabilities 19,540 18,380
Stockholders' equity:
Common stock 830 830
Additional paid-in capital 4,350 4,350
Total paid-in capital 5,180 5,180
Retained earnings 30,438 26,960
Total stockholders' equity 35,618 32,140
Total liabilities and stockholders' equity $ 55,158 $ 50,520

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year Last Year
Sales $ 82,000 $ 77,000
Cost of goods sold 53,500 49,500
Gross margin 28,500 27,500
Selling and administrative expenses:
Selling expenses 8,800 8,300
Administrative expenses 12,300 11,300
Total selling and administrative expenses 21,100 19,600
Net operating income 7,400 7,900
Interest expense 1,050 1,050
Net income before taxes 6,350 6,850
Income taxes 2,540 2,740
Net income 3,810 4,110
Dividends to common stockholders 332 664
Net income added to retained earnings 3,478 3,446
Beginning retained earnings 26,960 23,514
Ending retained earnings $ 30,438 $ 26,960

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 final answer 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 to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

Principles Of Cost Accounting

Authors: Edward J. Vanderbeck

14th Edition

0324374178, 978-0324374179

More Books

Students also viewed these Accounting questions

Question

What factors affect occupational accidents?

Answered: 1 week ago