Case 2 Comparative financial statements for Weller Corporation for the fi scal year ending December 31 appear below. The company did not issue any new common or preferred stock during the year. A total of 800,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.25. The market value of the company's common stock at the end of the year was $18. All of the company's sales are on account. Use 365 days for the ratios. Weller Corporation Weller Corporation Comparative Balance Sheet (dollars in thousands) Comparative Income Statement arnd Reconciliation (dollars in thousands) This Year Last Year This Year Last Year Assets Sales 79,000 74,000 Current assets: Cost of goods sold 52,000 Gross margin 48,000 26,000 27,000 1290 12,300 9,700 Cash 1560 9,100 8,200 Accounts, receivable, net Selling and administrative expenses: Selling expenses Administrative expenses Total selling & admin expenses Net operating income Interest expense Net income before taxes Income taxes (40%) Net income Dividends to preferred stockholders Net income remaining for common stockholdert Inventory Prepaid expenses Total current assets 1,800 2,100 8,500 8,000 25,000 20,960 12,000 11,000 20,500 6,500 19,000 Property and equipment Land Buildings and equipment, net Total property and equipment Total assets 7,000 600 6,000 6.000 19,000 25,000 45,960 600 19,200 5,900 6,400 2,560 3,840 25.200 2,360 3,540 120 3,420 50.280 400 3,440 Liabilities & Stockholders' Equity Current liabilities: Accounts payable Accrued payables Notes payable, short term Total current liabilities Dividend to common stockholders 200 200 9,500 8,300 3,240 Net income added to retained earrings Retained earnings, beginning of the year Retained earnings, end of the year 3,220 600 300 700 300 26,660 23,420 29.880 26,660 10,400 9,300 Long-term liabilities Bonds payable Total liabilities 5,000 5,000 15,400 14,300 Stockholders' equity Preferred stock 2,000 2.000 800 Common stock 800 Additional paid-in capital Total paid-in capital Retained Earnings Total stockholders' equity Total liabilities & stockholders' equity 2.200 5,000 29,880 2.200 5,000 26,660 31660 45,960 34,880 50.280