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Business
Accounting
Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Administrative expenses Total selling and administrative expenses Net operating income Interest expense 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 ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) > Answer is complete but not entirely correct. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier 13.57 0.65 1.65 This Year $ 72,000 40,000 32,000 11,400 7,300 18,700 13,300 980 12,320 4,928 7,392 240 7,152 33,942 $ 41,094 Last Year $ 64,000 40,000 24,000 10,700 6,400 17,100 6,900 980 5,920 2,368 3,552 450 3,102 30,840 $ 33,942

Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Administrative expenses Total selling and administrative expenses Net operating income Interest expense 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 ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) > Answer is complete but not entirely correct. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier 13.57 0.65 1.65 This Year $ 72,000 40,000 32,000 11,400 7,300 18,700 13,300 980 12,320 4,928 7,392 240 7,152 33,942 $ 41,094 Last Year $ 64,000 40,000 24,000 10,700 6,400 17,100 6,900 980 5,920 2,368 3,552 450 3,102 30,840 $ 33,942

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 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 $28. All of the company's sales are on account. Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Weller Corporation Comparative Balance Sheet (dollars in thousands) Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity This Year $ 1,240 10, 200 12,800 680 24,920 9,700 43,204 52,904 $ 77,824 $ 20,000 930 0 20,930 9,800 30,730 2,000 4,000 6,000 41,094 47,094 $ 77,824 Last Year $ 1,230 7,800 12,400 540 21,970 9,700 38,132 47,832 $ 69,802 $ 19,000 880 180 20,060 9,800 29,860 2,000 4,000 6,000 33,942 39,942 $ 69,802
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 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 $28. All of the company's sales are on account. Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets Property and equipment: Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock Weller Corporation Comparative Balance Sheet (dollars in thousands) Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity This Year $ 1,240 10, 200 12,800 680 24,920 9,700 43,204 52,904 $ 77,824 $ 20,000 930 0 20,930 9,800 30,730 2,000 4,000 6,000 41,094 47,094 $ 77,824 Last Year $ 1,230 7,800 12,400 540 21,970 9,700 38,132 47,832 $ 69,802 $ 19,000 880 180 20,060 9,800 29,860 2,000 4,000 6,000 33,942 39,942 $ 69,802
Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Administrative expenses Total selling and administrative expenses Net operating income Interest expense 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 ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) > Answer is complete but not entirely correct. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier 13.57 0.65 1.65 This Year $ 72,000 40,000 32,000 11,400 7,300 18,700 13,300 980 12,320 4,928 7,392 240 7,152 33,942 $ 41,094 Last Year $ 64,000 40,000 24,000 10,700 6,400 17,100 6,900 980 5,920 2,368 3,552 450 3,102 30,840 $ 33,942
Transcribed Image Text:Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Administrative expenses Total selling and administrative expenses Net operating income Interest expense 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 ratios for this year: 1. Times interest earned ratio. 2. Debt-to-equity ratio. 3. Equity multiplier. (For all requirements, round your answers to 2 decimal places.) > Answer is complete but not entirely correct. 1. Times interest earned ratio 2. Debt-to-equity ratio 3. Equity multiplier 13.57 0.65 1.65 This Year $ 72,000 40,000 32,000 11,400 7,300 18,700 13,300 980 12,320 4,928 7,392 240 7,152 33,942 $ 41,094 Last Year $ 64,000 40,000 24,000 10,700 6,400 17,100 6,900 980 5,920 2,368 3,552 450 3,102 30,840 $ 33,942
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