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 1,000,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $28. All of the company’s sales are on account. (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,300 $ 1,610 Accounts receivable, net 16,400 9,250 Inventory 10,700 9,000 Prepaid expenses 2,000 2,500 Total current assets 30,400 22,360 Property and equipment: Land 8,000 8,000 Buildings and equipment, net 21,200 21,000 Total property and equipment 29,200 29,000 Total assets $ 59,600 $ 51,360 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 11,500 $ 9,300 Accrued liabilities 1,000 1,700 Notes payable, short term 500 500 Total current liabilities 13,000 11,500 Long-term liabilities: Bonds payable 5,000 5,000 Total liabilities 18,000 16,500 Stockholders' equity: Common stock 1,000 1,000 Additional paid-in capital 5,200 5,200 Total paid-in capital 6,200 6,200 Retained earnings 35,400 28,660 Total stockholders' equity 41,600 34,860 Total liabilities and stockholders' equity $ 59,600 $ 51,360 Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands) This Year Last Year Sales $ 99,000 $ 94,000 Cost of goods sold 62,000 58,000 Gross margin 37,000 36,000 Selling and administrative expenses: Selling expenses 10,500 10,000 Administrative expenses 14,000 13,000 Total selling and administrative expenses 24,500 23,000 Net operating income 12,500 13,000 Interest expense 600 600 Net income before taxes 11,900 12,400 Income taxes 4,760 4,960 Net income 7,140 7,440 Dividends to common stockholders 400 800 Net income added to retained earnings 6,740 6,640 Beginning retained earnings 28,660 22,020 Ending retained earnings $ 35,400 $ 28,660 Required: Compute the following financial data for this year: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 5. Book value per share. (Round your answer to 2 decimal places.)

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 1,000,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $28. All of the company’s sales are on account. (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,300 $ 1,610 Accounts receivable, net 16,400 9,250 Inventory 10,700 9,000 Prepaid expenses 2,000 2,500 Total current assets 30,400 22,360 Property and equipment: Land 8,000 8,000 Buildings and equipment, net 21,200 21,000 Total property and equipment 29,200 29,000 Total assets $ 59,600 $ 51,360 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 11,500 $ 9,300 Accrued liabilities 1,000 1,700 Notes payable, short term 500 500 Total current liabilities 13,000 11,500 Long-term liabilities: Bonds payable 5,000 5,000 Total liabilities 18,000 16,500 Stockholders' equity: Common stock 1,000 1,000 Additional paid-in capital 5,200 5,200 Total paid-in capital 6,200 6,200 Retained earnings 35,400 28,660 Total stockholders' equity 41,600 34,860 Total liabilities and stockholders' equity $ 59,600 $ 51,360 Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands) This Year Last Year Sales $ 99,000 $ 94,000 Cost of goods sold 62,000 58,000 Gross margin 37,000 36,000 Selling and administrative expenses: Selling expenses 10,500 10,000 Administrative expenses 14,000 13,000 Total selling and administrative expenses 24,500 23,000 Net operating income 12,500 13,000 Interest expense 600 600 Net income before taxes 11,900 12,400 Income taxes 4,760 4,960 Net income 7,140 7,440 Dividends to common stockholders 400 800 Net income added to retained earnings 6,740 6,640 Beginning retained earnings 28,660 22,020 Ending retained earnings $ 35,400 $ 28,660 Required: Compute the following financial data for this year: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 5. Book value per share. (Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(dollars in thousands)
	This Year	Last Year
Assets
Current assets:
Cash	$	1,300	$	1,610
Accounts receivable, net		16,400		9,250
Inventory		10,700		9,000
Prepaid expenses		2,000		2,500
Total current assets		30,400		22,360
Property and equipment:
Land		8,000		8,000
Buildings and equipment, net		21,200		21,000
Total property and equipment		29,200		29,000
Total assets	$	59,600	$	51,360
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	11,500	$	9,300
Accrued liabilities		1,000		1,700
Notes payable, short term		500		500
Total current liabilities		13,000		11,500
Long-term liabilities:
Bonds payable		5,000		5,000
Total liabilities		18,000		16,500
Stockholders' equity:
Common stock		1,000		1,000
Additional paid-in capital		5,200		5,200
Total paid-in capital		6,200		6,200
Retained earnings		35,400		28,660
Total stockholders' equity		41,600		34,860
Total liabilities and stockholders' equity	$	59,600	$	51,360

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year	Last Year
Sales	$	99,000	$	94,000
Cost of goods sold		62,000		58,000
Gross margin		37,000		36,000
Selling and administrative expenses:
Selling expenses		10,500		10,000
Administrative expenses		14,000		13,000
Total selling and administrative expenses		24,500		23,000
Net operating income		12,500		13,000
Interest expense		600		600
Net income before taxes		11,900		12,400
Income taxes		4,760		4,960
Net income		7,140		7,440
Dividends to common stockholders		400		800
Net income added to retained earnings		6,740		6,640
Beginning retained earnings		28,660		22,020
Ending retained earnings	$	35,400	$	28,660

Required:

Compute the following financial data for this year:

1. Earnings per share. (Round your answer to 2 decimal places.)

2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.)

5. Book value per share. (Round your answer to 2 decimal places.)

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