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 950,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the companys common stock at the end of the year was $25.50. All of the companys sales are on account.

Weller Corporation Comparative Balance Sheet (dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash $ 770 $ 1,810
Accounts receivable, net 15,900 9,000
Inventory 10,450 8,800
Prepaid expenses 1,950 2,400
Total current assets 29,070 22,010
Property and equipment:
Land 7,500 7,500
Buildings and equipment, net 20,700 20,500
Total property and equipment 28,200 28,000
Total assets $ 57,270 $ 50,010
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 11,000 $ 9,050
Accrued liabilities 900 1,450
Notes payable, short term 450 450
Total current liabilities 12,350 10,950
Long-term liabilities:
Bonds payable 5,000 5,000
Total liabilities 17,350 15,950
Stockholders' equity:
Common stock 950 950
Additional paid-in capital 4,950 4,950
Total paid-in capital 5,900 5,900
Retained earnings 34,020 28,160
Total stockholders' equity 39,920 34,060
Total liabilities and stockholders' equity $ 57,270 $ 50,010

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year Last Year
Sales $ 94,000 $ 89,000
Cost of goods sold 59,500 55,500
Gross margin 34,500 33,500

Selling and administrative expenses:
Selling expenses 10,000 9,500
Administrative expenses 13,500 12,500
Total selling and administrative expenses 23,500 22,000
Net operating income 11,000 11,500
Interest expense 600 600
Net income before taxes 10,400 10,900
Income taxes 4,160 4,360
Net income 6,240 6,540
Dividends to common stockholders 380 760
Net income added to retained earnings 5,860 5,780
Beginning retained earnings 28,160 22,380
Ending retained earnings $ 34,020 $ 28,160

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

Residential Energy Auditing And Improvement

Authors: Stan Harbuck, Donna Harbuck

1st Edition

8770229252, 978-8770229258

More Books

Students also viewed these Accounting questions

Question

Write short notes on Interviews.

Answered: 1 week ago

Question

Write a letter asking them to refund your $1,500 down payment.

Answered: 1 week ago