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Home Answered Questions Accounting Every Answer I Get For 1-6 Tells Me I'm Wrong. Comparative Financial Statements For Weller Corporati

(Solved): Every Answer I Get For 1-6 Tells Me I'm Wrong. Comparative Financial Statements For Weller Corporati ...

Every answer I get for 1-6 tells me i'm wrong.

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 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 $23. 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 $ 1,090 $ 1,340
Accounts receivable, net 10,100 7,900
Inventory 13,100 11,000
Prepaid expenses 750 600
Total current assets 25,040 20,840
Property and equipment:
Land 10,600 10,600
Buildings and equipment, net 45,986 35,132
Total property and equipment 56,586 45,732
Total assets $ 81,626 $ 66,572
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 20,000 $ 17,600
Accrued liabilities 1,010 850
Notes payable, short term 120 120
Total current liabilities 21,130 18,570
Long-term liabilities:
Bonds payable 9,300 9,300
Total liabilities 30,430 27,870
Stockholders' equity:
Common stock 700 700
Additional paid-in capital 4,000 4,000
Total paid-in capital 4,700 4,700
Retained earnings 46,496 34,002
Total stockholders' equity 51,196 38,702
Total liabilities and stockholders' equity $ 81,626 $ 66,572
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
Sales $ 83,700 $ 66,000
Cost of goods sold 43,380 42,000
Gross margin 40,320 24,000
Selling and administrative expenses:
Selling expenses 10,900 10,800
Administrative expenses 7,200 6,000
Total selling and administrative expenses 18,100 16,800
Net operating income 22,220 7,200
Interest expense 930 930
Net income before taxes 21,290 6,270
Income taxes 8,516 2,508
Net income 12,774 3,762
Dividends to common stockholders 280 700
Net income added to retained earnings 12,494 3,062
Beginning retained earnings 34,002 30,940
Ending retained earnings $ 46,496 $ 34,002

Required:

Compute the following financial data for this year:

1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.)

2. Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

3. Inventory turnover. (Round your answer to 2 decimal places.)

4. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.)

6. Total asset turnover. (Round your answer to 2 decimal places.)

Expert Answer

Answer :- Computation of the following ratios for this year :- 1. Accounts Receivable Turnover = Net credit sales/ Average accounts receivable Accounts Receivable Tu
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