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 $29. 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 $1,220 9, 200 13,400 $ 1.240 7,500 12,000 Inventory Prepaid expenses 650 740 24,560 21,390 Total current assets Property and equipment: Land 9,500 9,500 44, 244 Buildings and equipment, net Total property and equipment 39, 119 48,619 53,744 Total assets $78,304 $70,009 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 20,200 $ 19, 200 Accrued liabilities 840 970 260 260 Notes payable, short term Total current liabilities Long-term liabilities: onge 21,430 20,300 vah Bonds payable 8,600 8,600 30,030 28,900 Total liabilities. Stockholders' equity: Common stock 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 43,774 36,609 Total stockholders' equity 48,274 41,109 Total liabilities and stockholders' equity $ 78,304 $70,009 Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 66,000 $ 75,985 44,450 39,000 Cost of goods sold Gross margin 31,535 27,000 Selling and administrative expenses: Selling expenses 11,300 10,500 Administrative expenses 7,100 6,400 Total selling and administrative expenses Net operating income 18,400 16,900 13,135 10, 100 Interest expense 860 860 Net income before taxes 12,275 9,240 Income taxes 4,910 3,696 Net income 7,365 5,544 Dividends to common stockholders 200 375 Net income added to retained earnings 5,169 7,165 36,609 Beginning retained earnings 31,440 Ending retained earnings $ 43,774 $36,609 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.) 2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 3. Inventory turnover. (Round your answer to 2 decimal places.) 4. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.) 5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.) 6. Total asset turnover. (Round your answer to 2 decimal places.) 1. Accounts receivable turnover 9.10 40.11 days 2. Average collection period 3. Inventory turnover 3.50 4. Average sale period 104.29 days 5. Operating cycle days 6. Total asset turnover
