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 $24. All of the company's sales are on account. Required: 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.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 $24. All of the company's sales are on account.

Required:
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.)

Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
This Year Last Year
Assets
Current assets:
$ 1,310
$ 1,110
10,600
12,100
770
Cash
Accounts receivable, net
7,600
11,100
Inventory
Prepaid expenses
630
Total current assets
24,580
20,640
Property and equipment:
Land
9,600
9,600
47,218
Buildings and equipment, net
39,678
Total property and equipment
56,818
49,278
Total assets
$81,398
$69,918
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$18,700
1,090
140
$19,300
Accrued liabilities
830
Notes payable, short term
140
Total current liabilities
19,930
20,270
Long-term liabilities:
Bonds payable
8,200
8,200
Total liabilities
28,130
28,470
Stockholders' equity:
Common stock
600
600
Additionall paid-in capital
Total paid-in capital
Retained earnings
4,000
4,000
4,600
48,668
4,600
36,848
Total stockholders' equity
53,268
41,448
Total liabilities and stockholders' equity
$81,398
$69,918
Transcribed Image Text:Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: $ 1,310 $ 1,110 10,600 12,100 770 Cash Accounts receivable, net 7,600 11,100 Inventory Prepaid expenses 630 Total current assets 24,580 20,640 Property and equipment: Land 9,600 9,600 47,218 Buildings and equipment, net 39,678 Total property and equipment 56,818 49,278 Total assets $81,398 $69,918 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $18,700 1,090 140 $19,300 Accrued liabilities 830 Notes payable, short term 140 Total current liabilities 19,930 20,270 Long-term liabilities: Bonds payable 8,200 8,200 Total liabilities 28,130 28,470 Stockholders' equity: Common stock 600 600 Additionall paid-in capital Total paid-in capital Retained earnings 4,000 4,000 4,600 48,668 4,600 36,848 Total stockholders' equity 53,268 41,448 Total liabilities and stockholders' equity $81,398 $69,918
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
Sales
$78,260
$65,000
Cost of goods sold
Gross margin
39,440
37,000
38,820
28,000
Selling and administrative expenses:
Selling expenses
11,300
6, 600
10,100
6,900
17,000
11,000
820
Administrative expenses
17,900
Total selling and administrative expenses
Net operating income
Interest expense
Net income before taxes
20,920
820
20,100
8,040
10,180
Income taxes
4,072
12,060
240
Net income
6,108
Dividends to common stockholders
600
Net income added to retained earnings
11,820
36,848
5,508
Beginning retained earnings
31,340
Ending retained earnings
$48,668
$36,848
Transcribed Image Text:Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $78,260 $65,000 Cost of goods sold Gross margin 39,440 37,000 38,820 28,000 Selling and administrative expenses: Selling expenses 11,300 6, 600 10,100 6,900 17,000 11,000 820 Administrative expenses 17,900 Total selling and administrative expenses Net operating income Interest expense Net income before taxes 20,920 820 20,100 8,040 10,180 Income taxes 4,072 12,060 240 Net income 6,108 Dividends to common stockholders 600 Net income added to retained earnings 11,820 36,848 5,508 Beginning retained earnings 31,340 Ending retained earnings $48,668 $36,848
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