PLEASE HELP FIND THE RIGHT ANSWERS WITH EXPLANATION. MY ANSWERS ARE WRONG Compar

Question

PLEASE HELP FIND THE RIGHT ANSWERS WITH EXPLANATION. MY ANSWERS ARE WRONG

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 $0.50. The market value of the company's common stock at the end of the year was $30. 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 Accounts receivable, net Inventory Prepaid expenses $ 1,260 $ 1,260 7,700 13,700 2,100 560 10,700 620 Total current assets 26,280 21,620 Property and equipment: Land Buildings and equipment, net 10,300 10,300 50,340 41,028 60,640 51,328 $86,920 $72,948 Totalpoperty and equipment Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities $19,000 $18,700 870 300 960 300 Notes payable, short term Total current liabilities Long-term liabilities 20,260 19,870 9,200 9,200 29,460 29,070 Bonds payable Total liabilities Stockholders' equity: Common stock Additional paid-in capital 700 4,000 700 4,000 4,700 4,700 Total paid-in capital Retained earnings 52,760 39,178 57,460 43,878 $86,920 $72,948 Total stockholders' equity Total liabilities and stockholders' equity

Explanation / Answer

ACCOUNTS RECEIVABLE TURNOVER = NET CREDIT SALES / (OPENING REC + CLOSING REC./2)

=80040 / (7700+10700/2)

   = 80040 / 9200

= 8.7 times

AVERAGE COLLECTION PERIOD = 365 days/ ACCOUNTS RECEIVABLE TURNOVER

   = 365/8.7

= 42 days(approx)

INVENTORY TURNOVER = COST OF GOODS SOLD / (OPENING INVENTORY + CLOSING INVENTORY/2)

   = 38700 / (12100+13700/2)

   = 38700/12900

   = 3 times

TOTAL ASSETS TURNOVER = TURNOVER / TOTAL ASSETS

= 86920/80040

= 1.086 times

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