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 $20. 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 $ 1,230 $ 1,350 Accounts receivable, net 10,900 6,900 Inventory 13,600 10,800 Prepaid expenses 670 620 Total current assets 26,400 19,670 Property and equipment: Land 9,200 9,200 Buildings and equipment, net 48,992 41,286 Total property and equipment 58,192 50,486 Total assets $ 84,592 $ 70,156 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,800 $ 17,600 Accrued liabilities 900 820 Notes payable, short term 190 190 Total current liabilities 20,890 18,610 Long-term liabilities: Bonds payable 8,900 8,900 Total liabilities 29,790 27,510 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 50,202 38,046 Total stockholders' equity 54,802 42,646 Total liabilities and stockholders' equity $ 84,592 $ 70,156 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 75,000 $ 66,000 Cost of goods sold 35,000 36,000 Gross margin 40,000 30,000 Selling and administrative expenses: Selling expenses 11,400 10,400 Administrative expenses 6,700 6,800 Total selling and administrative expenses 18,100 17,200 Net operating income 21,900 12,800 Interest expense 890 890 Net income before taxes 21,010 11,910 Income taxes 8,404 4,764 Net income 12,606 7,146 Dividends to common stockholders 450 240 Net income added to retained earnings 12,156 6,906 Beginning retained earnings 38,046 31,140 Ending retained earnings $ 50,202 $ 38,046 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.)

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 $20. 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 $ 1,230 $ 1,350 Accounts receivable, net 10,900 6,900 Inventory 13,600 10,800 Prepaid expenses 670 620 Total current assets 26,400 19,670 Property and equipment: Land 9,200 9,200 Buildings and equipment, net 48,992 41,286 Total property and equipment 58,192 50,486 Total assets $ 84,592 $ 70,156 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,800 $ 17,600 Accrued liabilities 900 820 Notes payable, short term 190 190 Total current liabilities 20,890 18,610 Long-term liabilities: Bonds payable 8,900 8,900 Total liabilities 29,790 27,510 Stockholders' equity: Common stock 600 600 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,600 4,600 Retained earnings 50,202 38,046 Total stockholders' equity 54,802 42,646 Total liabilities and stockholders' equity $ 84,592 $ 70,156 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 75,000 $ 66,000 Cost of goods sold 35,000 36,000 Gross margin 40,000 30,000 Selling and administrative expenses: Selling expenses 11,400 10,400 Administrative expenses 6,700 6,800 Total selling and administrative expenses 18,100 17,200 Net operating income 21,900 12,800 Interest expense 890 890 Net income before taxes 21,010 11,910 Income taxes 8,404 4,764 Net income 12,606 7,146 Dividends to common stockholders 450 240 Net income added to retained earnings 12,156 6,906 Beginning retained earnings 38,046 31,140 Ending retained earnings $ 50,202 $ 38,046 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

	This Year	Last Year
Weller Corporation Comparative Balance Sheet (dollars in thousands)
Assets
Current assets:
Cash	$ 1,230	$ 1,350
Accounts receivable, net	10,900	6,900
Inventory	13,600	10,800
Prepaid expenses	670	620
Total current assets	26,400	19,670
Property and equipment:
Land	9,200	9,200
Buildings and equipment, net	48,992	41,286
Total property and equipment	58,192	50,486
Total assets	$ 84,592	$ 70,156
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 19,800	$ 17,600
Accrued liabilities	900	820
Notes payable, short term	190	190
Total current liabilities	20,890	18,610
Long-term liabilities:
Bonds payable	8,900	8,900
Total liabilities	29,790	27,510
Stockholders' equity:
Common stock	600	600
Additional paid-in capital	4,000	4,000
Total paid-in capital	4,600	4,600
Retained earnings	50,202	38,046
Total stockholders' equity	54,802	42,646
Total liabilities and stockholders' equity	$ 84,592	$ 70,156

	This Year	Last Year
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
Sales	$ 75,000	$ 66,000
Cost of goods sold	35,000	36,000
Gross margin	40,000	30,000
Selling and administrative expenses:
Selling expenses	11,400	10,400
Administrative expenses	6,700	6,800
Total selling and administrative expenses	18,100	17,200
Net operating income	21,900	12,800
Interest expense	890	890
Net income before taxes	21,010	11,910
Income taxes	8,404	4,764
Net income	12,606	7,146
Dividends to common stockholders	450	240
Net income added to retained earnings	12,156	6,906
Beginning retained earnings	38,046	31,140
Ending retained earnings	$ 50,202	$ 38,046