60.1K

Verified Solution

Link Copied!

image

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. All of the companys sales are on account. Compute the following financial data for this year:

1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

$$\text{Unknown environment 'tabular'}$$ & liation & \ \hline & This Year & Last Year \ \hline Sales & $80,000 & $75,000 \ \hline Cost of goods sold & 52,500 & 48,500 \ \hline Gross margin & 27,500 & 26,500 \ \hline Selling and administrative expenses: & & \ \hline Selling expenses & 8,600 & 8,100 \ \hline Administrative expenses & 12,100 & 11,100 \ \hline Total selling and administrative expenses & 20,700 & 19,200 \ \hline Net operating income & 6,800 & 7,300 \ \hline Interest expense & 750 & 750 \ \hline Net income before taxes & 6,050 & 6,558 \ \hline Income taxes & 2,420 & 2,620 \ \hline Net income & 3,630 & 3,930 \ \hline Dividends to common stockholders & 324 & 648 \ \hline Net income added to retained earnings & 3,306 & 3,282 \ \hline Beginning retained earnings & 26,760 & 23,478 \ \hline Ending retained earnings & $30,066 & $26,768 \ \hline \end{tabular}

Answer & Explanation Solved by verified expert

See Answer