Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
Fantastic news! We've Found the answer you've been seeking!
Question:
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 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 $28. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets $ 1,190 10,300 $ 1,390 13,600 8,400 11,600 600 690 25,690 22,080 Property and equipment: Land 9,300 9,300 Buildings and equipment, net 51,284 41,427 Total property and equipment 60,584 50,727 $ Total assets $ 72,807 86,274 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities $ $ 19,100 20,200 1,030 880 260 260 21,490 20,240 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock 9,300 9,300 30,790 29,540 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 50,984 38,767 Total stockholders' equity 55,484 43,267 $ Total liabilities and stockholders' equity $ 72,807 86,274 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 85,085 $ 65,000 Cost of goods sold 45,360 34,000 Gross margin 39,725 31,000 Selling and administrative expenses: Selling expenses 11,500 10,200 Administrative expenses 6,600 6,700 Total selling and administrative expenses 18,100 16,900 Net operating income 21,625 14,100 Interest expense 930 Net income before taxes Income taxes 20,695 8,278 930 13,170 5,268 Net income 12,417 7,902 Dividends to common stockholders 200 375 Net income added to retained earnings 12,217 7,527 Beginning retained earnings 38,767 31,240 Ending retained earnings $ 50,984 $ 38,767 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume all sales are on account.) Note: Round your answer to 2 decimal places. 2. Average collection period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 3. Inventory turnover. Note: Round your answer to 2 decimal places. 4. Average sale period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 5. Operating cycle. Note: Round your intermediate calculations and final answer to 2 decimal places. 6. Total asset turnover. Note: Round your answer to 2 decimal places. 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days days 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 $28. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses Total current assets $ 1,190 10,300 $ 1,390 13,600 8,400 11,600 600 690 25,690 22,080 Property and equipment: Land 9,300 9,300 Buildings and equipment, net 51,284 41,427 Total property and equipment 60,584 50,727 $ Total assets $ 72,807 86,274 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities $ $ 19,100 20,200 1,030 880 260 260 21,490 20,240 Long-term liabilities: Bonds payable Total liabilities Stockholders' equity: Common stock 9,300 9,300 30,790 29,540 500 500 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,500 4,500 Retained earnings 50,984 38,767 Total stockholders' equity 55,484 43,267 $ Total liabilities and stockholders' equity $ 72,807 86,274 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 85,085 $ 65,000 Cost of goods sold 45,360 34,000 Gross margin 39,725 31,000 Selling and administrative expenses: Selling expenses 11,500 10,200 Administrative expenses 6,600 6,700 Total selling and administrative expenses 18,100 16,900 Net operating income 21,625 14,100 Interest expense 930 Net income before taxes Income taxes 20,695 8,278 930 13,170 5,268 Net income 12,417 7,902 Dividends to common stockholders 200 375 Net income added to retained earnings 12,217 7,527 Beginning retained earnings 38,767 31,240 Ending retained earnings $ 50,984 $ 38,767 Required: Compute the following financial data for this year: 1. Accounts receivable turnover. (Assume all sales are on account.) Note: Round your answer to 2 decimal places. 2. Average collection period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 3. Inventory turnover. Note: Round your answer to 2 decimal places. 4. Average sale period. Note: Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places. 5. Operating cycle. Note: Round your intermediate calculations and final answer to 2 decimal places. 6. Total asset turnover. Note: Round your answer to 2 decimal places. 1. Accounts receivable turnover 2. Average collection period 3. Inventory turnover 4. Average sale period 5. Operating cycle 6. Total asset turnover days days days
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Axel Corporation acquires 100% of the stock of Wheal Company on December 31, Year 4. The following information pertains to Wheal Company on the date of acquisition: Book Value Fair Value Cash $...
-
Bay of Plenty' Electricity (BOPE) is an electrical utility company in the Bay of Plenty, New Zealand. BOPE has 21 company cars that the head-office employees share for company business. However, BOPE...
-
James and Alvo Ltd are wholesalers of bicycles. The company buys goods from a number of bicycle manufacturers. Manufacturers offer trade discounts for large orders. During October 2014 the following...
-
Derive the equation of motion for the elastically restrained rigid beam shown in Figure 6.69 using (a) Newton's second law, and (b) Lagrange's equation. k 00000 K k 00000 eeeee ? K3 m, L eelle K4...
-
Nicholas is the facilities manager for Green Market Groceries. The store is remodeling and wants to determine which brand of freezer to use for its frozen goods section. The freezers vary by size,...
-
Let -5-25-21 A = -2 -6 -4 6 30 24 (a) Compute det(A) = (b) Use Cramer's rule to solve the following system -5x1 - 25x2 - 21 X3 = 1 -2x1 - 6.x2 - 4x3 = -2 6x1 + 30x2 + 24x3 = 5 x = x2 = x3 =
-
3. Does UDP require a mechanism to estimate the RTT between sender and receiver? Briefly explain your answer. [4 points]
-
What are some implications for the revenue cycle of value-based payment?
-
What is country risk? Describe several types of country risk.
-
What four phases make up the revenue cycle?
-
Why do organizations need a cash budget?
-
Define liquidity.
-
A growing number of managers believe that in order to work on difficult business problems, they must refrain from looking at e-mail for certain blocks of time during the day. In what ways might check...
-
Saccharin is an artificial sweetener that is used in diet beverages. In order for it to be metabolized by the body, it must pass into cells. Below are shown the two forms of saccharin. Saccharin has...
-
Which of the following statements best describes an auditor's responsibility to detect errors and fraud? a. The auditor should study and evaluate the client's internal control, and design the audit...
-
Which of the following is not an example of an error? a. Entity personnel make mistakes in gathering or processing accounting data from which financial statements are prepared. b. Entity personnel...
-
What assurance does the auditor provide that errors, fraud, and direct-effect illegal acts that are material to the financial statements will be detected? a. Negative. b. Limited. c. Absolute. d....
Study smarter with the SolutionInn App