Comparative financial statements for Weller Corporation, a trading company, for the year ending December 31...
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Comparative financial statements for Weller Corporation, a trading company, for the year ending December 31 are shown below.
The company did not issue new common shares during the year. A total of 800,000 common shares were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per common share 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 company sales are on account.
Weller Corporation Comparative Balance Sheet (dollars in thousands)
This year
Last year
Assets
Current assets:
Money
ps
1,280
ps
1,560
Accounts receivable, net
12,300
9,100
Inventory
9,700
8,200
Prepaid expenses
1,800
2100
Total current assets
25,080
20,960
Property and equipment:
Tierra
6,000
6,000
Buildings and equipment, net
19,200
19,000
Total properties and equipment
25,200
25,000
total assets
ps
50,280
ps
45,960
Liabilities and Equity
current liabilities:
Accounts payable
ps
9,500
ps
8,300
Accrued Obligations
600
700
Short-term notes payable
300
300
Total current liabilities
10,400
9,300
Long term passives:
Obligations with the public
5,000
5,000
Full responsibility
15,400
14,300
Equity:
Common actions
800
800
Additional payment in principal
4200
4200
Total paid up capital
5,000
5,000
Retained earnings
29,880
26,660
Equity of total shareholders
34,880
31,660
Total liabilities and stockholders' equity
ps
50,280
ps
45,960
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This year
Last year
Sales
ps
79,000
ps
74.000
cost of goods sold
52,000
48,000
Gross margin
27,000
26,000
Selling and administration expenses:
selling expenses
8,500
8,000
administrative expenses
12,000
11,000
Total selling and administrative expenses
20.500
19,000
operating margin
6,500
7,000
Interest expenses
600
600
Net income before taxes
5,900
6,400
Income taxes
2,360
2,560
Net Income
3,540
3,840
Dividends to common shareholders
320
600
Net income added to retained earnings
3,220
3,240
Initial retained earnings
26,660
23,420
End of Retained Earnings
ps
29,880
ps
26,660
Required
1. Percentage of gross margin.
2. Percentage of net profit margin.
3. Return on total assets.
4. Return on own resources.
Answer & Explanation
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