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 $27. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,260 10,800 14,000 730 26,790 $ 1,310 6,600 12,300 690 20,900 10,800 46,168 56,968 $83,758 10,800 38,949 49,749 $70,649 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 current 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 $19,100 980 190 20,270 $18,200 770 190 19,160 9,100 29,370 9,100 28,260 7020 700 4,000 4,700 49,688 54,388 $83,758 700 4,000 4,700 37,689 42,389 $70,649 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $80,040 $65,000 Cost of goods sold 40,765 36,000 Gross margin 39,275 29,000 Selling and administrative expenses: Selling expenses 11,000 10,400 Administrative expenses 6,900 6,400 Total selling and administrative expenses 17,900 16,800 Net operating income 21, 375 12,200 Interest expense 910 910 Net income before taxes 20,465 11,290 Income taxes 8,186 4,516 Net income 12,279 6,774 Dividends to common stockholders 280 525 Net income added to retained earnings 11,999 6,249 Beginning retained earnings 37,689 31,440 Ending retained earnings $49,688 $37,689 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. 7.41 X Accounts receivable turnover Average collection period Inventory turnover Average sale period Operating cycle Total asset turnover 49.25 XI days 2.91 X 125.42 X days 174.67 $ days 0.96 6
