Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 500,000 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 $28. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets $ 1,190 10,300 $ 1,390 13,600 8,400 11,600 600 690 25,690 22,080 Property and equipment: Land 9,300 9,300 Buildings and equipment, net 51,284 41,427 Total property and equipment 60,584 50,727 $ Total assets $ 72,807 86,274 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities $ $ 19,100 20,200 1,030 880 260 260 21,490 20,240 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock 9,300 9,300 30,790 29,540 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 50,984 38,767 Total stockholders' equity 55,484 43,267 $ Total liabilities and stockholders' equity $ 72,807 86,274 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 85,085 $ 65,000 Cost of goods sold 45,360 34,000 Gross margin 39,725 31,000 Selling and administrative expenses: Selling expenses 11,500 10,200 Administrative expenses 6,600 6,700 Total selling and administrative expenses 18,100 16,900 Net operating income 21,625 14,100 Interest expense 930 Net income before taxes Income taxes 20,695 8,278 930 13,170 5,268 Net income 12,417 7,902 Dividends to common stockholders 200 375 Net income added to retained earnings 12,217 7,527 Beginning retained earnings 38,767 31,240 Ending retained earnings $ 50,984 $ 38,767 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume all sales are on account.) Note: Round your answer to 2 decimal places. 2. Average collection period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 3. Inventory turnover. Note: Round your answer to 2 decimal places. 4. Average sale period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 5. Operating cycle. Note: Round your intermediate calculations and final answer to 2 decimal places. 6. Total asset turnover. Note: Round your answer to 2 decimal places. 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days days 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 500,000 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 $28. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets $ 1,190 10,300 $ 1,390 13,600 8,400 11,600 600 690 25,690 22,080 Property and equipment: Land 9,300 9,300 Buildings and equipment, net 51,284 41,427 Total property and equipment 60,584 50,727 $ Total assets $ 72,807 86,274 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities $ $ 19,100 20,200 1,030 880 260 260 21,490 20,240 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock 9,300 9,300 30,790 29,540 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 50,984 38,767 Total stockholders' equity 55,484 43,267 $ Total liabilities and stockholders' equity $ 72,807 86,274 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 85,085 $ 65,000 Cost of goods sold 45,360 34,000 Gross margin 39,725 31,000 Selling and administrative expenses: Selling expenses 11,500 10,200 Administrative expenses 6,600 6,700 Total selling and administrative expenses 18,100 16,900 Net operating income 21,625 14,100 Interest expense 930 Net income before taxes Income taxes 20,695 8,278 930 13,170 5,268 Net income 12,417 7,902 Dividends to common stockholders 200 375 Net income added to retained earnings 12,217 7,527 Beginning retained earnings 38,767 31,240 Ending retained earnings $ 50,984 $ 38,767 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume all sales are on account.) Note: Round your answer to 2 decimal places. 2. Average collection period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 3. Inventory turnover. Note: Round your answer to 2 decimal places. 4. Average sale period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 5. Operating cycle. Note: Round your intermediate calculations and final answer to 2 decimal places. 6. Total asset turnover. Note: Round your answer to 2 decimal places. 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days days
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Why is it important to know if a company's receivables balance includes non-customer receivables in the annual financial report?
-
You are evaluating two projects with the following cash flows: Year Project X Project Y 0 $542,400 $512,500 1 219,400 209,100 2 229,300 218,900 3 236,500 226,800 4 196,200 187,600 What is the...
-
Once a manager completes the budgeted income statement, they can adjust the budget to set a different target net income by revising the sales, production, and component budgets
-
Axel Corporation acquires 100% of the stock of Wheal Company on December 31, Year 4. The following information pertains to Wheal Company on the date of acquisition: Book Value Fair Value Cash $...
-
The Department of Psychiatry in Cambridge Hospital (C'H), Massachusetts, wanted to know the effect of the number of its beds on demand for beds in the local public mental hospital (PH). A study was...
-
If a machine had a cost of $4,000 with an accumulated amortization of $1,000, what would be its book value?
-
Nigh Company uses budgets in controlling costs. The August 2002 budget report for the company's Assembling Department is as follows. The budget data in the report are based on the master budget for...
-
Prostuff Company produces catchers mitts. Currently, Prostuff charges a price of $35 per mitt. Variable costs are $23.10 per mitt, and fixed costs are $23,800. The tax rate is 40 percent. Last year,...
-
1.2) Suppose (3) is the terminal point, on the unit circle, determined by t. Find the termina point determined by each of the following: (a) -t (b) t+ Ea 2 (c) -t (d) t-
-
ABC Accident Repair Limited carries out a large number of repairs for accident cars. For next year it plans 2,500 repairs based on the following costs: Annual costs for 2,500 repairs Direct labour...
-
Recently staff has been complaining about abusive physician behavior. A process introduced to deal with abusive physician behavior alienates some doctors. As a direct result of the staff complaints,...
-
In an effort to keep low-wage workers' salaries commensurate with the cost of living, a number of states have amended their constitutions to allow the minimum wage to be adjusted with inflation. You...
-
Quality is often described as the fourth triple - constraint ( cost , schedule, and scope being the other three constraints ) . Address this project quality topic by discussing the following key...
-
You are required to design a performance management and review process (system) for the role of a medical receptionist at your practice. Produce a copy of the process and any supporting documents to...
-
Enterprises often leverage on information systems (IS) to achieve competitive advantage. Explain any FOUR (4) strategies for competitive advantage. For each strategy, provide ONE (1) relevant example.
-
2 What is the general overall focus of the common law tests for determining whether someone is an employee or independent contractor? (Do not list all the tests, but in 15 words or fewer just the...
-
If the amplifier indicated by the box input impedance of oo, which of the following statements are true ? has an open loop gain as well as Feedback factor (\beta = 1/ R_1\) The feedback is voltage...
-
The process of acquiring individuals, units, and/or firms to bring in useful knowledge to the organization is called __________. (a) grafting (b) strategy (c) scanning (d) mimicry
-
A firm which refuses to use debt in its capital structure even though it is capable of doing so will: a. Have too low of a WACC b. Incorrectly calculate prospective project NPVs as being too high c....
-
When calculating WACC, if we wanted to abide by common practice, we would: a. Always use nominal rates b. Always use effective rates c. Use nominal rates on bonds only d. Use nominal rates on stock...
Study smarter with the SolutionInn App