Comparative financial statements for Weller Corporation, a merchandising company

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 $1.00 last year and $0.65 this year. The market value of the company’s common stock at the end of the year was $22. 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 $1.00 last year and $0.65 this year. The market value of the company’s common stock at the end of the year was $22. All of the company’s sales are on account.

Explanation / Answer

Answer:

1. Working capital=CA-CL

=$25230-$19710=$5520

Answer:2 Current ratio=CA/CL

=$25230/$19710=1.28 times

Answer: Quick ratio=QA/CL

=($25230-$12500-$750)/$19710=0.61 times

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.