EC2 Q1 Comparative financial statements for Weller Corporation, a merchandising company, for the yea

EC2 Q1

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 500,000 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 $29. All of the company's sales are on account Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year $ 1,110 10,500 12,400 640 24,650 $ 1,270 7,400 11,100 550 20,320 9,400 45,680 55,080 $ 79,730 9,400 41,765 51,165 $71,485 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 Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $18,500 840 $18,700 920 120 19,740 120 19,460 10,000 29,740 29,460 500 4,000 4,500 45,490 49,990 $ 79,730 500 4,000 4,500 37,525 42,025 $71,485 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $71,000 $65,000 Cost of goods sold 39,000 36,000 Gross margin 32,000 29,000 Selling and administrative expenses: Selling expenses 10,600 10,900 Administrative expenses 6,500 6,000 Total selling and administrative expenses 17,100 16,900 Net operating income 14,900 12,100 Interest expense 1,000 1,000 Net income before taxes 13,900 11,100 Income taxes 5,560 4,440 Net income 8,340 6,660 Dividends to common stockholders 375 375 Net income added to retained earnings 7,965 6,285 Beginning retained earnings 37,525 31,240 Ending retained earnings $45,490 $37,525 Required: Compute the following financial data and ratios for this year: 1. Working capital. (Enter answer in thousands.) 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.) 1. Working capital 2. Current ratio 3. Acid-test ratio

 

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