Question
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 990,000 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 $0.40. The market value of the companys common stock at the end of the year was $27.50. All of the companys sales are on account. |
Weller Corporation Comparative Balance Sheet (dollars in thousands) | ||||||
This Year | Last Year | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 5,834 | $ | 6,650 | ||
Accounts receivable, net | 16,300 | 9,200 | ||||
Inventory | 10,650 | 8,960 | ||||
Prepaid expenses | 1,990 | 2,480 | ||||
Total current assets | 34,774 | 27,290 | ||||
Property and equipment: | ||||||
Land | 7,900 | 7,900 | ||||
Buildings and equipment, net | 21,100 | 20,900 | ||||
Total property and equipment | 29,000 | 28,800 | ||||
Total assets | $ | 63,774 | $ | 56,090 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 11,400 | $ | 9,250 | ||
Accrued liabilities | 980 | 1,650 | ||||
Notes payable, short term | 490 | 490 | ||||
Total current liabilities | 12,870 | 11,390 | ||||
Long-term liabilities: | ||||||
Bonds payable | 10,000 | 10,000 | ||||
Total liabilities | 22,870 | 21,390 | ||||
Stockholders' equity: | ||||||
Common stock | 990 | 990 | ||||
Additional paid-in capital | 5,150 | 5,150 | ||||
Total paid-in capital | 6,140 | 6,140 | ||||
Retained earnings | 34,764 | 28,560 | ||||
Total stockholders' equity | 40,904 | 34,700 | ||||
Total liabilities and stockholders' equity | $ | 63,774 | $ | 56,090 | ||
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) | ||||||
This Year | Last Year | |||||
Sales | $ | 98,000 | $ | 93,000 | ||
Cost of goods sold | 61,500 | 57,500 | ||||
Gross margin | 36,500 | 35,500 | ||||
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Selling and administrative expenses: | ||||||
Selling expenses | 10,400 | 9,900 | ||||
Administrative expenses | 13,900 | 12,900 | ||||
Total selling and administrative expenses | 24,300 | 22,800 | ||||
Net operating income | 12,200 | 12,700 | ||||
Interest expense | 1,200 | 1,200 | ||||
Net income before taxes | 11,000 | 11,500 | ||||
Income taxes | 4,400 | 4,600 | ||||
Net income | 6,600 | 6,900 | ||||
Dividends to common stockholders | 396 | 396 | ||||
Net income added to retained earnings | 6,204 | 6,504 | ||||
Beginning retained earnings | 28,560 | 22,056 | ||||
Ending retained earnings | $ | 34,764 | $ | 28,560 | ||
Required: | ||||||
Compute the following financial data for this year:
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