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 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 end of this year was $23.50. 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 | $ 1,506 | $ 1,720 |
| Accounts receivable, net | 15,500 | 10,300 |
| Inventory | 10,250 | 8,640 |
| Prepaid expenses | 1,910 | 2,320 |
| Total current assets | 29,166 | 22,980 |
| Property and equipment: | ||
| Land | 7,100 | 7,100 |
| Buildings and equipment, net | 20,300 | 20,100 |
| Total property and equipment | 27,400 | 27,200 |
| Total assets | $ 56,566 | $ 50,180 |
| Liabilities and Stockholders’ Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 10,600 | $ 8,850 |
| Accrued liabilities | 820 | 1,250 |
| Notes payable, short term | 410 | 410 |
| Total current liabilities | 11,830 | 10,510 |
| Long-term liabilities: | ||
| Bonds payable | 6,250 | 6,250 |
| Total liabilities | 18,080 | 16,760 |
| Stockholders’ equity: | ||
| Common stock | 910 | 910 |
| Additional paid-in capital | 4,750 | 4,750 |
| Total paid-in capital | 5,660 | 5,660 |
| Retained earnings | 32,826 | 27,760 |
| Total stockholders’ equity | 38,486 | 33,420 |
| Total liabilities and stockholders’ equity | $ 56,566 | $ 50,180 |
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
| This Year | Last Year | |
|---|---|---|
| Sales | $ 90,000 | $ 85,000 |
| Cost of goods sold | 57,500 | 53,500 |
| Gross margin | 32,500 | 31,500 |
| Selling and administrative expenses: | ||
| Selling expenses | 9,600 | 9,100 |
| Administrative expenses | 13,100 | 12,100 |
| Total selling and administrative expenses | 22,700 | 21,200 |
| Net operating income | 9,800 | 10,300 |
| Interest expense | 750 | 750 |
| Net income before taxes | 9,050 | 9,550 |
| Income taxes | 3,620 | 3,820 |
| Net income | 5,430 | 5,730 |
| Dividends to common stockholders | 364 | 728 |
| Net income added to retained earnings | 5,066 | 5,002 |
| Beginning retained earnings | 27,760 | 22,758 |
| Ending retained earnings | $ 32,826 | $ 27,760 |
Required:
Compute the following financial data for this year:
