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 $23. All of the company’s sales are on account.

Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.)

Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

Inventory turnover. (Round your answer to 2 decimal places.)

Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.)

Total asset turnover. (Round your answer to 2 decimal places.)

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 $23. All of the company’s sales are on account.

Explanation / Answer

Ans 1 Sales 76,820.00 Average Accounts Receivabe     8,350.00 Accounts receivable turnover             9.20 Ans 2 Average collection period 365/Accounts receivable turnover           39.67 Ans 3 Cost of Goods Sold 43,290.00 Average Inventory 11,700.00 Inventory Turnover =Cost of Goods sold/Average Inventory             3.70 Ans 4 Average Sale Period 365/Inventory Turnover           98.65 Ans 5 Operating Cycle=Average collection Period+Average sale period        138.32 Ans 6 Average Total assets 76,442.00 Turnover 76,820.00 Total asset turnover=Turnover/Average Total Assets             1.00

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