Question

Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...

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 840,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $20. 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 $ 6,344 $ 6,400
     Accounts receivable, net 12,700 9,300
     Inventory 9,900 8,360
     Prepaid expenses 1,840 2,180
  Total current assets 30,784 26,240
  Property and equipment:
     Land 6,400 6,400
     Buildings and equipment, net 19,600 19,400
  Total property and equipment 26,000 25,800
  Total assets $ 56,784 $ 52,040
  Liabilities and Stockholders' Equity
  Current liabilities:
     Accounts payable $ 9,900 $ 8,500
     Accrued liabilities 680 900
     Notes payable, short term 340 340
  Total current liabilities 10,920 9,740
  Long-term liabilities:
     Bonds payable 10,000 10,000
  Total liabilities 20,920 19,740
  Stockholders' equity:
     Common stock 840 840
     Additional paid-in capital 4,400 4,400
       Total paid-in capital 5,240 5,240
       Retained earnings 30,624 27,060
  Total stockholders' equity 35,864 32,300
  Total liabilities and stockholders' equity $ 56,784 $ 52,040
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
This Year Last Year
  Sales $ 83,000 $ 78,000
  Cost of goods sold 54,000 50,000
  Gross margin 29,000 28,000
  Selling and administrative expenses:
     Selling expenses 8,900 8,400
     Administrative expenses 12,400 11,400
  Total selling and administrative expenses 21,300 19,800
  Net operating income 7,700 8,200
  Interest expense 1,200 1,200
  Net income before taxes 6,500 7,000
  Income taxes 2,600 2,800
  Net income 3,900 4,200
  Dividends to common stockholders 336 630
  Net income added to retained earnings 3,564 3,570
  Beginning retained earnings 27,060 23,490
  Ending retained earnings $ 30,624 $ 27,060
Required:
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).)

Gross margin percentage 4.6 %

      

2.

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

Net profit margin percentage 4.3 %

       

3.

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

Return on total assets 8.6 %

       

4.

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

Return on equity 12.34 %

Homework Answers

Answer #1

Answer- 1)- Gross profit percentage = (Gross profit/Net Sales)*100

= ($29000/$83000)*100

= 34.9%

2)- Net profit margin percentage = (Net income/Net sales)*100

= ($3900/$83000)*100

= 4.7%

3)- Return on total assets =(Net income/Average total assets)*100

={$3900/($52040+$56784)/2}*100

=($3900/$54412)*100

=7.2%

4)- Return on common stockholder’s equity=Net income-Preferred dividends/Average common stockholder’s equity

= {$3900/($32300+$35864)/2}

= ($3900/$34082)*100

= 11.44%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 820,000 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...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 970,000 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...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 930,000 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...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 930,000 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...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 980,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock...
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear...
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 910,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock...