Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year $89,000 57,000 32,000 Sales $84,000 Cost of goods sold Gross margin 53,000 31,000 Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Net operating income 9,500 13,000 22,500 9,000 12,000 21,000 9,500 10,000 Interest expense 600 600 8,900 3,560 5,340 Net income before taxes 9,400 3,760 5,640 Income taxes Net income Dividends to common stockholders 360 720 Net income added to retained earnings Beginning retained earnings 4,980 27,660 4,920 22,740 Ending retained earnings $32,640 $27,660

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 900,000 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 company's common stock at the end of this year was $23. All of the company's sales are on account.

Required:
Compute the following financial data for this year:

1. Gross margin percentage. (Round your percentage answer to 1 decimal place.)
2. Net profit margin percentage. (Round your percentage answer to 1 decimal place.)
3. Return on total assets. (Round your percentage answer to 1 decimal place.)
4. Return on equity. (Round your percentage answer to 2 decimal places.)

Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash
240
510
15,400
10,200
1,900
27,740
Accounts receivable, net
10,250
8,600
2,300
Inventory
Prepaid expenses
Total current assets
21,660
Property and equipment:
Land
7,000
7,000
20,000
Buildings and equipment, net
20,200
Total property and equipment
27,200
27,000
Total assets
$54,940
$48,660
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$10,500
$ 8,800
Accrued liabilities
800
1,200
Notes payable, short term
400
400
Total current liabilities
11,700
10,400
Long-term liabilities:
Bonds payable
5,000
5,000
Total liabilities
16,700
15,400
Stockholders' equity:
Common stock
900
900
Additionall paid-in capital
Total paid-in capital
4,700
5,600
4,700
5,600
Retained earnings
32,640
27,660
Total stockholders' equity
38,240
33,260
Total liabilities and stockholders' equity
$54,940
$48,660
Transcribed Image Text:Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash 240 510 15,400 10,200 1,900 27,740 Accounts receivable, net 10,250 8,600 2,300 Inventory Prepaid expenses Total current assets 21,660 Property and equipment: Land 7,000 7,000 20,000 Buildings and equipment, net 20,200 Total property and equipment 27,200 27,000 Total assets $54,940 $48,660 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $10,500 $ 8,800 Accrued liabilities 800 1,200 Notes payable, short term 400 400 Total current liabilities 11,700 10,400 Long-term liabilities: Bonds payable 5,000 5,000 Total liabilities 16,700 15,400 Stockholders' equity: Common stock 900 900 Additionall paid-in capital Total paid-in capital 4,700 5,600 4,700 5,600 Retained earnings 32,640 27,660 Total stockholders' equity 38,240 33,260 Total liabilities and stockholders' equity $54,940 $48,660
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
$89,000
Sales
$84,000
Cost of goods sold
57,000
53,000
Gross margin
32,000
31,000
Selling and administrative expenses:
Selling expenses
Administrative expenses
9,500
13,000
9,000
12,000
21,000
10,000
22,500
Total selling and administrative expenses
Net operating income
9,500
Interest expense
600
600
Net income before taxes
8,900
3,560
9,400
3,760
5,640
Income taxes
5,340
360
Net income
Dividends to common stockholders
Net income added to retained earnings
720
4,920
4,980
27,660
Beginning retained earnings
22,740
Ending retained earnings
$32,640
$27,660
Transcribed Image Text:Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year $89,000 Sales $84,000 Cost of goods sold 57,000 53,000 Gross margin 32,000 31,000 Selling and administrative expenses: Selling expenses Administrative expenses 9,500 13,000 9,000 12,000 21,000 10,000 22,500 Total selling and administrative expenses Net operating income 9,500 Interest expense 600 600 Net income before taxes 8,900 3,560 9,400 3,760 5,640 Income taxes 5,340 360 Net income Dividends to common stockholders Net income added to retained earnings 720 4,920 4,980 27,660 Beginning retained earnings 22,740 Ending retained earnings $32,640 $27,660
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