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 company's common stock at the end of this year was $30. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,990 $ 1,280 Accounts receivable, net 11,000 7,100 Inventory 12,200 12,400 Prepaid expenses 620 520 Total current assets 24,910 21,300 Property and equipment: Land 9,000 9,000 Buildings and equipment, net 47,652 39, 306 Total property and equipment 56,652 48,306 Total assets $ 81,562 $ 69,606 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,800 $ 18,000 Accrued liabilities 900 800 Notes payable, short term 220 220 Total current liabilities 20,920 19,820 Long-term liabilities: Bonds payable 8,900 8,900 Total liabilities 29,820 27,920 Stockholders' equity: Common stock 600 600 220 20,920 220 19,020 8,900 29,820 8,900 27,920 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 600 4,000 4,600 47, 142 51,742 $ 81,562 600 4,000 4,600 37,086 41,686 $ 69, 606 Last Year $ 64,000 36,000 28,000 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales $ 71,000 Cost of goods sold 34,000 Gross margin 37,000 Selling and administrative expenses: Selling expenses 11,500 Administrative expenses 7,100 Total selling and administrative expenses 18,600 Net operating income 18,400 Interest expense 890 Net income before taxes 17,510 Income taxes 7,004 Net income 10,506 Dividends to common stockholders 450 Net income added to retained earnings 10,056 Beginning retained earnings 37,086 Ending retained earnings $ 47, 142 10,100 6,700 16,800 11,200 890 10,310 4, 124 6,186 240 5,946 31,140 $ 37,086 37,000 28,000 Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 11,500 7,100 18,600 18,400 890 17,510 7,004 10,506 450 10,056 37,086 $ 47, 142 10,100 6,700 16,800 11,200 890 10, 310 4,124 6,186 240 5,946 31,140 $ 37,086 Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter your answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio (Round your answer to 2 decimal places.) 1. Working capital 2. Current ratio 3. Acid-test ratio
