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 800,000 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 $18. All of the companys sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,280 $ 1,560 Accounts receivable, net 12,300 9,100 Inventory 9,700 8,200 Prepaid expenses 1,800 2,100 Total current assets 25,080 20,960 Property and equipment: Land 6,000 6,000 Buildings and equipment, net 19,200 19,000 Total property and equipment 25,200 25,000 Total assets $ 50,280 $ 45,960 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 9,500 $ 8,300 Accrued liabilities 600 700 Notes payable, short term 300 300 Total current liabilities 10,400 9,300 Long-term liabilities: Bonds payable 5,000 5,000 Total liabilities 15,400 14,300 Stockholders' equity: Common stock 800 800 Additional paid-in capital 4,200 4,200 Total paid-in capital 5,000 5,000 Retained earnings 29,880 26,660 Total stockholders' equity 34,880 31,660 Total liabilities and stockholders' equity $ 50,280 $ 45,960 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 79,000 $ 74,000 Cost of goods sold 52,000 48,000 Gross margin 27,000 26,000 Selling and administrative expenses: Selling expenses 8,500 8,000 Administrative expenses 12,000 11,000 Total selling and administrative expenses 20,500 19,000 Net operating income 6,500 7,000 Interest expense 600 600 Net income before taxes 5,900 6,400 Income taxes 2,360 2,560 Net income 3,540 3,840 Dividends to common stockholders 320 600 Net income added to retained earnings 3,220 3,240 Beginning retained earnings 26,660 23,420 Ending retained earnings $ 29,880 $ 26,660 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

Step: 3

blur-text-image

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

Wiley CPAexcel Exam Review Focus Notes Auditing And Attestation 2022

Authors: Wiley

1st Edition

111984858X, 978-1119848585

More Books

Students also viewed these Accounting questions

Question

Distinguish between fund capital assets and general capital assets.

Answered: 1 week ago