Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31...
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Accounting
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 810,000 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 companys common stock at the end of this year was $18.50. All of the companys sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands)
This Year
Last Year
Assets
Current assets:
Cash
$ 2,546
$ 2,770
Accounts receivable, net
12,400
9,150
Inventory
9,750
8,240
Prepaid expenses
1,810
2,120
Total current assets
26,506
22,280
Property and equipment:
Land
6,100
6,100
Buildings and equipment, net
19,300
19,100
Total property and equipment
25,400
25,200
Total assets
$ 51,906
$ 47,480
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$ 9,600
$ 8,350
Accrued liabilities
620
750
Notes payable, short term
310
310
Total current liabilities
10,530
9,410
Long-term liabilities:
Bonds payable
6,250
6,250
Total liabilities
16,780
15,660
Stockholders' equity:
Common stock
810
810
Additional paid-in capital
4,250
4,250
Total paid-in capital
5,060
5,060
Retained earnings
30,066
26,760
Total stockholders' equity
35,126
31,820
Total liabilities and stockholders' equity
$ 51,906
$ 47,480
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year
Last Year
Sales
$ 80,000
$ 75,000
Cost of goods sold
52,500
48,500
Gross margin
27,500
26,500
Selling and administrative expenses:
Selling expenses
8,600
8,100
Administrative expenses
12,100
11,100
Total selling and administrative expenses
20,700
19,200
Net operating income
6,800
7,300
Interest expense
750
750
Net income before taxes
6,050
6,550
Income taxes
2,420
2,620
Net income
3,630
3,930
Dividends to common stockholders
324
648
Net income added to retained earnings
3,306
3,282
Beginning retained earnings
26,760
23,478
Ending retained earnings
$ 30,066
$ 26,760
Required:
Compute the following financial data for this year:
1. Earnings per share. (Round your answer to 2 decimal places.)
2. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
3. Dividend payout ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
4. Dividend yield ratio. (Round your intermediate calculations and final answer to 2 decimal places.)
5. Book value per share. (Round your answer to 2 decimal places.)
Answer & Explanation
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