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 $23. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: $ 1,240 10,700 13,500 $ 1,370 7,400 12,500 560 Cash Accounts receivable, net Inventory Prepaid expenses 620 Total current assets 26,060 21,830 Property and equipment: Land 10,500 40,950 51,450 $ 77,510 10,500 Buildings and equipment, net Total property and equipment 34,630 45,130 $ 66,960 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,900 $ 18,700 Accrued liabilities 900 730 Notes payable, short term Total current liabilities 300 300 21,100 19,730 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: 8,500 29,600 8,500 28,230 Common stock 600 600 Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 4,000 4,600 43,310 47,910 4,000 4,600 34,130 38,730 $ 66,960 $ 77,510
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 $23. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: $ 1,240 10,700 13,500 $ 1,370 7,400 12,500 560 Cash Accounts receivable, net Inventory Prepaid expenses 620 Total current assets 26,060 21,830 Property and equipment: Land 10,500 40,950 51,450 $ 77,510 10,500 Buildings and equipment, net Total property and equipment 34,630 45,130 $ 66,960 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,900 $ 18,700 Accrued liabilities 900 730 Notes payable, short term Total current liabilities 300 300 21,100 19,730 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: 8,500 29,600 8,500 28,230 Common stock 600 600 Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 4,000 4,600 43,310 47,910 4,000 4,600 34,130 38,730 $ 66,960 $ 77,510
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![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 $23. All of the company's sales are on account.
Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
This Year Last Year
Assets
Current assets:
$ 1,240
10,700
13,500
Cash
$ 1,370
Accounts receivable, net
Inventory
Prepaid expenses
7,400
12,500
620
560
Total current assets
26,060
21,830
Property and equipment:
Land
10,500
10,500
Buildings and equipment, net
Total property and equipment
40,950
51,450
34,630
45,130
Total assets
$ 77,510
$ 66,960
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$ 19,900
$ 18,700
730
Accrued liabilities
900
300
300
Notes payable, short term
Total current liabilities
21,100
19,730
Long-term liabilities:
Bonds payable
8,500
8,500
Total liabilities
29,600
28,230
Stockholders' equity:
Common stock
600
600
Additional paid-in capital
Total paid-in capital
Retained earnings
Total stockholders' equity
4,000
4,000
4,600
43,310
4,600
34,130
47,910
38,730
Total liabilities and stockholders' equity
$ 77,510
$ 66,960](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a9cdb11-f1e5-4f12-9bde-49e90ee0952d%2F7307ca39-cbb6-4022-a454-4e4d7b8ea583%2F9e9mr_processed.png&w=3840&q=75)
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 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 $23. All of the company's sales are on account.
Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
This Year Last Year
Assets
Current assets:
$ 1,240
10,700
13,500
Cash
$ 1,370
Accounts receivable, net
Inventory
Prepaid expenses
7,400
12,500
620
560
Total current assets
26,060
21,830
Property and equipment:
Land
10,500
10,500
Buildings and equipment, net
Total property and equipment
40,950
51,450
34,630
45,130
Total assets
$ 77,510
$ 66,960
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$ 19,900
$ 18,700
730
Accrued liabilities
900
300
300
Notes payable, short term
Total current liabilities
21,100
19,730
Long-term liabilities:
Bonds payable
8,500
8,500
Total liabilities
29,600
28,230
Stockholders' equity:
Common stock
600
600
Additional paid-in capital
Total paid-in capital
Retained earnings
Total stockholders' equity
4,000
4,000
4,600
43,310
4,600
34,130
47,910
38,730
Total liabilities and stockholders' equity
$ 77,510
$ 66,960
![Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
$ 74,000
39,000
35,000
$ 65,000
41,000
24,000
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses
Administrative expenses
10,200
6,900
17,100
11,200
Total selling and administrative expenses
Net operating income
Interest expense
6,900
18,100
16,900
6,900
850
850
Net income before taxes
16,050
6,420
9,630
6,050
2,420
3,630
Income taxes
Net income
Dividends to common stockholders
450
240
Net income added to retained earnings
Beginning retained earnings
9,180
34,130
3,390
30,740
Ending retained earnings
$ 43,310
$ 34,130
Required:
Compute the following financial data and ratios for this year:
1. Working capital. (Enter your answer in thousands.)
2. Current ratio. (Round your answer to 2 decimal places.)
3. Acid-test ratio. (Round your answer to 2 decimal places.)
1. Working capital
2. Current ratio
3. Acid-test ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a9cdb11-f1e5-4f12-9bde-49e90ee0952d%2F7307ca39-cbb6-4022-a454-4e4d7b8ea583%2Fy2niqpp_processed.png&w=3840&q=75)
Transcribed Image Text:Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
$ 74,000
39,000
35,000
$ 65,000
41,000
24,000
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses
Administrative expenses
10,200
6,900
17,100
11,200
Total selling and administrative expenses
Net operating income
Interest expense
6,900
18,100
16,900
6,900
850
850
Net income before taxes
16,050
6,420
9,630
6,050
2,420
3,630
Income taxes
Net income
Dividends to common stockholders
450
240
Net income added to retained earnings
Beginning retained earnings
9,180
34,130
3,390
30,740
Ending retained earnings
$ 43,310
$ 34,130
Required:
Compute the following financial data and ratios for this year:
1. Working capital. (Enter your answer in thousands.)
2. Current ratio. (Round your answer to 2 decimal places.)
3. Acid-test ratio. (Round your answer to 2 decimal places.)
1. Working capital
2. Current ratio
3. Acid-test ratio
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