Comparative financial statements for Weller Corporation, a merchandising company
ID: 2474783 • Letter: C
Question
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 600,000 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.
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 600,000 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.
Explanation / Answer
Working capital = total current assets – total current liabilities
=23,890 - 20,410
= $3,480
Current ratio = current assets/ current liabilities
=23,890/20410
= 1.17
Acid test ratio = ( cash + accounts receivable ) / current liabilities
= (1110 + 9300) / 20410
= .51
Working capital = total current assets – total current liabilities
=23,890 - 20,410
= $3,480
Current ratio = current assets/ current liabilities
=23,890/20410
= 1.17
Acid test ratio = ( cash + accounts receivable ) / current liabilities
= (1110 + 9300) / 20410
= .51
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