Weller Corporation Comparative Balance Sheet (dollars in thousancis) This Year Last Year Assets Current assets: $ 1,280 12,300 9,700 Cash.. $ 1,560 Accounts recetvabie, net 9.100 Inventory 8,200 Prepaid expenses 1,800 2,100 Total current assots 25,080 20,960 Property and equipment Land 6,000 6,000 Buldings and equipment, net 19,200 19.000 Total property and equipment 25,200 25,000 Total assets $50,280 $45,960 Llabilities and Stockholders' Equity Current liabities: Accounts payable. $ 9,500 $ 8,300 Accrued liabilities 600 700 Notes payable, short term 300 300 Total current liabilities 10,400 9,300 Long-term liabilities: Bonds payable .. 5,000 5,000 Total liabilities 15,400 14,300 Stockholders' equity: Common stock 800 800 Additional paid-In capital 4.200 4,200 5,000 5,000 Total paid-in capital Retained earnings 29,880 26.660 31,660 Total stockholders' equity. 34,880 Total liabilities and stockholders' equity.... $50.280 $45.960 Weiler Corporation Comparative Income Statement and Reconciliation (dollars in thousends) This Year Last Year Sales.. $79,000 $74,000 48,000 26,000 Cost of goods sold 52.000 27,000 Gross margin.. Seling and admintistrative expenses Seling expenses ... 8,500 8,000 . 12,000 20,500 Administrative expenses 11,000 Total selling and administrative expenses... Net operating income... Interest expense....... 19,000 6,500 7,000 ... 600 600 Net income before taxes. Income taxes.. Net income.. Dividends to common stockholders 5,900 2,360 6,400 2,560 3,540 3,840 320 600 ***.. Net income added to retained earnings Beginning retained earnings 3.220 26,660 3,240 23.420 $26.660 Ending reteined eamings $29,880

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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Financial Ratios for Assessing Liquidity

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 800,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, 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 $18. All of the company’s sales are on account.

Required:

Compute the following financial data and ratios for this year:

1. Working capital.

2. Current ratio.

3. Acid-test ratio.

Weller Corporation
Comparative Balance Sheet
(dollars in thousancis)
This Year
Last Year
Assets
Current assets:
$ 1,280
12,300
9,700
Cash..
$ 1,560
Accounts recetvabie, net
9.100
Inventory
8,200
Prepaid expenses
1,800
2,100
Total current assots
25,080
20,960
Property and equipment
Land
6,000
6,000
Buldings and equipment, net
19,200
19.000
Total property and equipment
25,200
25,000
Total assets
$50,280
$45,960
Llabilities and Stockholders' Equity
Current liabities:
Accounts payable.
$ 9,500
$ 8,300
Accrued liabilities
600
700
Notes payable, short term
300
300
Total current liabilities
10,400
9,300
Long-term liabilities:
Bonds payable ..
5,000
5,000
Total liabilities
15,400
14,300
Stockholders' equity:
Common stock
800
800
Additional paid-In capital
4.200
4,200
5,000
5,000
Total paid-in capital
Retained earnings
29,880
26.660
31,660
Total stockholders' equity.
34,880
Total liabilities and stockholders' equity....
$50.280
$45.960

Weiler Corporation
Comparative Income Statement and Reconciliation
(dollars in thousends)
This Year
Last Year
Sales..
$79,000
$74,000
48,000
26,000
Cost of goods sold
52.000
27,000
Gross margin..
Seling and admintistrative expenses
Seling expenses ...
8,500
8,000
.
12,000
20,500
Administrative expenses
11,000
Total selling and administrative expenses...
Net operating income...
Interest expense.......
19,000
6,500
7,000
...
600
600
Net income before taxes.
Income taxes..
Net income..
Dividends to common stockholders
5,900
2,360
6,400
2,560
3,540
3,840
320
600
***..
Net income added to retained earnings
Beginning retained earnings
3.220
26,660
3,240
23.420
$26.660
Ending reteined eamings
$29,880

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