Comparative financial statements for Weller Corporation,a merchandising company, for the year endingDecember 31 appear below. The company did not issueany new common stock during the year. A total of600,000 shares of common stock were outstanding. Theinterest rate on the bond payable was 10%, the incometax rate was 40%, and the dividend per share ofcommon stock was $0.75 last year and $0.40 this year.The market value of the company's common stock at theend of this year was $25. All of the company's sales areon account.AssetsCurrent assets:Cash****Accounts receivable, netToveInventoryPrepaid expensesTotal current assetsProperty and equipment:LandBuildings and equipment, netTotal property and equipmentTotal assetsWeller CorporationComparative Balance Sheet(dollars in thousands)Liabilities and Stockholders' EquityCurrent liabilities:Accounts payableAccrued liabilitiesNotes payable, short termTotal current liabilitiesliabilities:Long-termBonds payableTotal liabilitiesStockholders equity:Common stockmionAdditional paid-in capitalTotal paid-in capitalRetained earningsTotal stockholders' equityTotal liabilities and stockholders' equityThis Year$ 1,20010,90013,70073026,5309,80044,17053,970$ 80,500$ 19,3001,06017020,5309,00029,5306004,0004,60046,37050,970$ 80,500Last Year$ 1,3308,20012,30069022,5209,80036,94046,740$ 69,260$ 18,20073017019,1009,00028,1006004,0004,60036,56041,160$ 69,260 Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands)SalesCost of goods soldGross marginSelling and administrative expenses:Selling expensesAdministrative expensesTotal selling and administrative expensesNet operating incomeInterest expenseNet income before taxesIncome taxesNet incomeDividends to common stockholdersNet income added to retained earningsBeginning retained earningsEnding retained earningsThis Year$ 70,00035,00035,0001. Working capital2. Current ratio3. Acid-test ratioRequired: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.)10,6006,40017,00018,0009009,81036,560$ 46,37017,1006,84010,260450Last Year$ 65,00037,00028,00010, 2006,80017,00011,00090010,1004,0406,0602405,82030,740$ 36,560

Working Capital :— It is the difference between total current assets and total current liabilities.…

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses 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 This Year $ 70,000 35,000 35,000 1. Working capital 2. Current ratio 3. Acid-test ratio 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.) 10,600 6,400 17,000 18,000 900 9,810 36,560 $ 46,370 17,100 6,840 10,260 450 Last Year $ 65,000 37,000 28,000 10, 200 6,800 17,000 11,000 900 10,100 4,040 6,060 240 5,820 30,740 $ 36,560

Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses 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 This Year $ 70,000 35,000 35,000 1. Working capital 2. Current ratio 3. Acid-test ratio 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.) 10,600 6,400 17,000 18,000 900 9,810 36,560 $ 46,370 17,100 6,840 10,260 450 Last Year $ 65,000 37,000 28,000 10, 200 6,800 17,000 11,000 900 10,100 4,040 6,060 240 5,820 30,740 $ 36,560

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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