This question is from chapter 15 of Managerial Accounting 16^th edition by Ray Garrison.

Exercise 15-4 Financial Ratios for Debt Management [LO15-4] 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 600,000 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 $21. All of the company's sales are on account. Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Accounts receivable, net Inventory Prepaid expenses 10,000 13,100 740 1,250 1,320 6,600 12,200 Total current assets Property and equipment: 20,620 Land 10,700 40,992 51,692 10,700 39,056 Buildings and equipment, Total property and equipment Total assets Liabilities and Stockholders Equity Current liabilities: $76,782 $70,376 Accounts payable Accrued liabilities Notes payable, short term 19,100 $19,300 780 Total current liabilities Long-term liabilities: 20,060 20,260 Bonds payable Total liabilities Stockholders equity: 28,960 Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders equity 4,0002,000 6,000 41,822 47,822 $76,782 41,216 $70,376 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales Cost of goods sold Gross margin Selling and administrative expenses: $69,000 $66,000 39,000 30,00050o 10,600 16,900 25,000 Selling expenses 10,700 Administrative expenses Total selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 17,700 12,300 100 890 7,210 4,326 $41,822 $35,216