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 $26. All of the company’s sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,100 $ 1,290 Accounts receivable, net 10,200 7,100 Inventory 12,100 12,600 Prepaid expenses 700 590 Total current assets 24,100 21,580 Property and equipment: Land 10,300 10,300 Buildings and equipment, net 50,970 40,022 Total property and equipment 61,270 50,322 Total assets $ 85,370 $ 71,902 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,800 $ 19,400 Accrued liabilities 1,080 900 Notes payable, short term 130 130 Total current liabilities 21,010 20,430 Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 29,810 29,230 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 50,960 38,072 Total stockholders' equity 55,560 42,672 Total liabilities and stockholders' equity $ 85,370 $ 71,902 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 79,580 $ 65,000 Cost of goods sold 39,520 34,000 Gross margin 40,060 31,000 Selling and administrative expenses: Selling expenses 10,500 10,900 Administrative expenses 6,800 7,000 Total selling and administrative expenses 17,300 17,900 Net operating income 22,760 13,100 Interest expense 880 880 Net income before taxes 21,880 12,220 Income taxes 8,752 4,888 Net income 13,128 7,332 Dividends to common stockholders 240 600 Net income added to retained earnings 12,888 6,732 Beginning retained earnings 38,072 31,340 Ending retained earnings $ 50,960 $ 38,072 Required: Compute the following financial data for this year: 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.)

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 $26. All of the company’s sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,100 $ 1,290 Accounts receivable, net 10,200 7,100 Inventory 12,100 12,600 Prepaid expenses 700 590 Total current assets 24,100 21,580 Property and equipment: Land 10,300 10,300 Buildings and equipment, net 50,970 40,022 Total property and equipment 61,270 50,322 Total assets $ 85,370 $ 71,902 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,800 $ 19,400 Accrued liabilities 1,080 900 Notes payable, short term 130 130 Total current liabilities 21,010 20,430 Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 29,810 29,230 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 50,960 38,072 Total stockholders' equity 55,560 42,672 Total liabilities and stockholders' equity $ 85,370 $ 71,902 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 79,580 $ 65,000 Cost of goods sold 39,520 34,000 Gross margin 40,060 31,000 Selling and administrative expenses: Selling expenses 10,500 10,900 Administrative expenses 6,800 7,000 Total selling and administrative expenses 17,300 17,900 Net operating income 22,760 13,100 Interest expense 880 880 Net income before taxes 21,880 12,220 Income taxes 8,752 4,888 Net income 13,128 7,332 Dividends to common stockholders 240 600 Net income added to retained earnings 12,888 6,732 Beginning retained earnings 38,072 31,340 Ending retained earnings $ 50,960 $ 38,072 Required: Compute the following financial data for this year: 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.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Weller Corporation Comparative Balance Sheet (dollars in thousands)
	This Year	Last Year
Assets
Current assets:
Cash	$	1,100	$	1,290
Accounts receivable, net		10,200		7,100
Inventory		12,100		12,600
Prepaid expenses		700		590
Total current assets		24,100		21,580
Property and equipment:
Land		10,300		10,300
Buildings and equipment, net		50,970		40,022
Total property and equipment		61,270		50,322
Total assets	$	85,370	$	71,902
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	19,800	$	19,400
Accrued liabilities		1,080		900
Notes payable, short term		130		130
Total current liabilities		21,010		20,430
Long-term liabilities:
Bonds payable		8,800		8,800
Total liabilities		29,810		29,230
Stockholders' equity:
Common stock		600		600
Additional paid-in capital		4,000		4,000
Total paid-in capital		4,600		4,600
Retained earnings		50,960		38,072
Total stockholders' equity		55,560		42,672
Total liabilities and stockholders' equity	$	85,370	$	71,902

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year	Last Year
Sales	$	79,580	$	65,000
Cost of goods sold		39,520		34,000
Gross margin		40,060		31,000
Selling and administrative expenses:
Selling expenses		10,500		10,900
Administrative expenses		6,800		7,000
Total selling and administrative expenses		17,300		17,900
Net operating income		22,760		13,100
Interest expense		880		880
Net income before taxes		21,880		12,220
Income taxes		8,752		4,888
Net income		13,128		7,332
Dividends to common stockholders		240		600
Net income added to retained earnings		12,888		6,732
Beginning retained earnings		38,072		31,340
Ending retained earnings	$	50,960	$	38,072

Required:

Compute the following financial data for this year:

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.)

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