Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appearbelow. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock wereoutstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share ofcommon stock was $0.75 last year and $0.40 this year. The market value of the company's common stock at the end of thisyear was $23. All of the company's sales are on account.Weller CorporationComparative Balance Sheet(dollars in thousands)This Year Last YearAssetsCurrent assets:$ 1,24010,70013,500Cash$ 1,370Accounts receivable, netInventoryPrepaid expenses7,40012,500620560Total current assets26,06021,830Property and equipment:Land10,50010,500Buildings and equipment, netTotal property and equipment40,95051,45034,63045,130Total assets$ 77,510$ 66,960Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable$ 19,900$ 18,700730Accrued liabilities900300300Notes payable, short termTotal current liabilities21,10019,730Long-term liabilities:Bonds payable8,5008,500Total liabilities29,60028,230Stockholders' equity:Common stock600600Additional paid-in capitalTotal paid-in capitalRetained earningsTotal stockholders' equity4,0004,0004,60043,3104,60034,13047,91038,730Total liabilities and stockholders' equity$ 77,510$ 66,960 Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands)This Year Last Year$ 74,00039,00035,000$ 65,00041,00024,000SalesCost of goods soldGross marginSelling and administrative expenses:Selling expensesAdministrative expenses10,2006,90017,10011,200Total selling and administrative expensesNet operating incomeInterest expense6,90018,10016,9006,900850850Net income before taxes16,0506,4209,6306,0502,4203,630Income taxesNet incomeDividends to common stockholders450240Net income added to retained earningsBeginning retained earnings9,18034,1303,39030,740Ending retained earnings$ 43,310$ 34,130Required: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 capital2. Current ratio3. Acid-test ratio

Working capital = Current assets - current liabilities Current ratio = Current assets / current…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q