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 700,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, 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 companyâs common stock at the end of the year was $26. All of the companyâs sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,200 $ 1,290 Accounts receivable, net 9,300 6,800 Inventory 12,600 12,500 Prepaid expenses 720 510 Total current assets 23,820 21,100 Property and equipment: Land 10,800 10,800 Buildings and equipment, net 40,704 35,947 Total property and equipment 51,504 46,747 Total assets $ 75,324 $ 67,847 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,200 $ 18,100 Accrued liabilities 910 860 Notes payable, short term 280 280 Total current liabilities 20,390 19,240 Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 29,190 28,040 Stockholders' equity: Common stock 700 700 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,700 4,700 Retained earnings 41,434 35,107 Total stockholders' equity 46,134 39,807 Total liabilities and stockholders' equity $ 75,324 $ 67,847 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 69,000 $ 65,000 Cost of goods sold 39,000 39,000 Gross margin 30,000 26,000 Selling and administrative expenses: Selling expenses 11,200 10,600 Administrative expenses 6,500 6,700 Total selling and administrative expenses 17,700 17,300 Net operating income 12,300 8,700 Interest expense 880 880 Net income before taxes 11,420 7,820 Income taxes 4,568 3,128 Net income 6,852 4,692 Dividends to common stockholders 525 525 Net income added to retained earnings 6,327 4,167 Beginning retained earnings 35,107 30,940 Ending retained earnings $ 41,434 $ 35,107 Required: Compute the following financial data and ratios for this year: 1. Working capital. 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.)
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 700,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, 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 companyâs common stock at the end of the year was $26. All of the companyâs sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,200 $ 1,290 Accounts receivable, net 9,300 6,800 Inventory 12,600 12,500 Prepaid expenses 720 510 Total current assets 23,820 21,100 Property and equipment: Land 10,800 10,800 Buildings and equipment, net 40,704 35,947 Total property and equipment 51,504 46,747 Total assets $ 75,324 $ 67,847 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 19,200 $ 18,100 Accrued liabilities 910 860 Notes payable, short term 280 280 Total current liabilities 20,390 19,240 Long-term liabilities: Bonds payable 8,800 8,800 Total liabilities 29,190 28,040 Stockholders' equity: Common stock 700 700 Additional paid-in capital 4,000 4,000 Total paid-in capital 4,700 4,700 Retained earnings 41,434 35,107 Total stockholders' equity 46,134 39,807 Total liabilities and stockholders' equity $ 75,324 $ 67,847 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year Sales $ 69,000 $ 65,000 Cost of goods sold 39,000 39,000 Gross margin 30,000 26,000 Selling and administrative expenses: Selling expenses 11,200 10,600 Administrative expenses 6,500 6,700 Total selling and administrative expenses 17,700 17,300 Net operating income 12,300 8,700 Interest expense 880 880 Net income before taxes 11,420 7,820 Income taxes 4,568 3,128 Net income 6,852 4,692 Dividends to common stockholders 525 525 Net income added to retained earnings 6,327 4,167 Beginning retained earnings 35,107 30,940 Ending retained earnings $ 41,434 $ 35,107 Required: Compute the following financial data and ratios for this year: 1. Working capital. 2. Current ratio. (Round your answer to 2 decimal places.) 3. Acid-test ratio. (Round your answer to 2 decimal places.)
