Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal 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. The market value of the company’s common stock at the end of the year was $26. 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 $ 1,190 $ 1,410
Accounts receivable, net 9,400 7,800
Inventory 13,800 11,300
Prepaid expenses 650 680
Total current assets 25,040 21,190
Property and equipment: Land 9,900 9,900
Buildings and equipment, net 45,574 38,587
Total property and equipment 55,474 48,487
Total assets $ 80,514 $ 69,677
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable $ 19,500 $ 17,500
Accrued liabilities 980 870
Notes payable, short term 180 180
Total current liabilities 20,660 18,550
Long-term liabilities: Bonds payable 8,800 8,800
Total liabilities 29,460 27,350
Stockholders' equity:
Common stock 700 700
Additional paid-in capital 4,000 4,000
Total paid-in capital 4,700 4,700
Retained earnings 46,354 37,627
Total stockholders' equity 51,054 42,327
Total liabilities and stockholders' equity $ 80,514 $ 69,677
Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year Last Year
Sales $ 71,000 $ 65,000
Cost of goods sold 37,000 35,000
Gross margin 34,000 30,000
Selling and administrative expenses:
Selling expenses 10,600 10,800
Administrative expenses 7,100 6,300
Total selling and administrative expenses 17,700 17,100
Net operating income 16,300 12,900
Interest expense 880 880
Net income before taxes 15,420 12,020
Income taxes 6,168 4,808
Net income 9,252 7,212
Dividends to common stockholders 525 525
Net income added to retained earnings 8,727 6,687
Beginning retained earnings 37,627 30,940
Ending retained earnings $ 46,354 $ 37,627
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.)