Refer to the data in Exercise 16-2 for Weller Corporation.

Data From Exercise 16-2:

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.

Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)

Required:

Compute the following financial data for this year:

1. Accounts receivable turnover. (Assume that all sales are on account.)

2. Average collection period.

3. Inventory turnover.

4. Average sale period.

5. Operating cycle.

6. Total asset turnover.

Transcribed Image Text:

Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash ..... $ 1,280 $ 1,560 Accounts receivable, net 12,300 9,100 Inventory 9,700 8,200 Prepaid expenses 1,800 2,100 Total current assets 25,080 20,960 Property and equipment: Land 6,000 6,000 Buildings and equipment, net 19,200 19,000 Total property and equipment 25,200 25,000 Total assets $50,280 $45,960 Liabilities and Stockholders' Equity Current liabilities: 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 Total paid-in capital Retained earnings 5,000 5,000 29,880 26,660 ... .. Total stockholders' equity 34,880 31,660