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 700,000 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 $27. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: $ 1,150 10,200 $ 1,280 12,600 7,000 12,300 730 590 24,680 21,170 Land 10,800 10,800 Buildings and equipment, net 43,663 39,694 Total property and equipment 54,463 50,494 Total assets $ 79,143 $ 71,664 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities $ 18,700 1,100 $ 18,200 880 Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity 300 300 20,100 19,380 9,600 9,600 29,700 28,980 700 700 4,000 4,000 4,700 44,743 4,700 37,984 49,443 42,684 $ 79,143 $ 71,664 Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales Cost of goods sold $ 69,000 38,000 Last Year $ 65,000 35,000 Gross margin 31,000 30,000 Selling and administrative expenses: Selling expenses 10,700 10,900 Administrative expenses 7,200 6,100 Total selling and administrative expenses 17,900 17,000 Net operating income 13,100 13,000 Interest expense 960 960 Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 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.) 12,140 4,856 7,284 525 6,759 37,984 $ 44,743 7,224 280 6,944 31,040 $ 37,984 12,040 4,816 1. Working capital $ 4,270 2. Current ratio 1.21 3. Acid-test ratio 0.55

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 52E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...
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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 700,000 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 $27. 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
Accounts receivable, net
Inventory
Prepaid expenses
Total current assets
Property and equipment:
$ 1,150
10,200
$ 1,280
12,600
7,000
12,300
730
590
24,680
21,170
Land
10,800
10,800
Buildings and equipment, net
43,663
39,694
Total property and equipment
54,463
50,494
Total assets
$ 79,143
$ 71,664
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Accrued liabilities
$ 18,700
1,100
$ 18,200
880
Notes payable, short term
Total current liabilities
Long-term liabilities:
Bonds payable
Total liabilities
Stockholders' equity:
Common stock
Additional paid-in capital
Total paid-in capital
Retained earnings
Total stockholders' equity
300
300
20,100
19,380
9,600
9,600
29,700
28,980
700
700
4,000
4,000
4,700
44,743
4,700
37,984
49,443
42,684
$ 79,143
$ 71,664
Total liabilities and stockholders' equity
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year
Sales
Cost of goods sold
$ 69,000
38,000
Last Year
$ 65,000
35,000
Gross margin
31,000
30,000
Selling and administrative expenses:
Selling expenses
10,700
10,900
Administrative expenses
7,200
6,100
Total selling and administrative expenses
17,900
17,000
Net operating income
13,100
13,000
Interest expense
960
960
Net income before taxes
Income taxes
Net income
Dividends to common stockholders
Net income added to retained earnings
Beginning retained earnings
Ending retained earnings
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.)
12,140
4,856
7,284
525
6,759
37,984
$ 44,743
7,224
280
6,944
31,040
$ 37,984
12,040
4,816
1. Working capital
$
4,270
2. Current ratio
1.21
3. Acid-test ratio
0.55
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 700,000 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 $27. 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 Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: $ 1,150 10,200 $ 1,280 12,600 7,000 12,300 730 590 24,680 21,170 Land 10,800 10,800 Buildings and equipment, net 43,663 39,694 Total property and equipment 54,463 50,494 Total assets $ 79,143 $ 71,664 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities $ 18,700 1,100 $ 18,200 880 Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity 300 300 20,100 19,380 9,600 9,600 29,700 28,980 700 700 4,000 4,000 4,700 44,743 4,700 37,984 49,443 42,684 $ 79,143 $ 71,664 Total liabilities and stockholders' equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Sales Cost of goods sold $ 69,000 38,000 Last Year $ 65,000 35,000 Gross margin 31,000 30,000 Selling and administrative expenses: Selling expenses 10,700 10,900 Administrative expenses 7,200 6,100 Total selling and administrative expenses 17,900 17,000 Net operating income 13,100 13,000 Interest expense 960 960 Net income before taxes Income taxes Net income Dividends to common stockholders Net income added to retained earnings Beginning retained earnings Ending retained earnings 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.) 12,140 4,856 7,284 525 6,759 37,984 $ 44,743 7,224 280 6,944 31,040 $ 37,984 12,040 4,816 1. Working capital $ 4,270 2. Current ratio 1.21 3. Acid-test ratio 0.55
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