FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Can you help me answer numbers 4 and 5 in the screen shot? The financial statements and additional info are below. Thank you

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 840,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $20.00. 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 $ 6,344   $ 6,400  
     Accounts receivable, net   12,700     9,300  
     Inventory   9,900     8,360  
     Prepaid expenses   1,840     2,180  
             
  Total current assets   30,784     26,240  
             
  Property and equipment:            
     Land   6,400     6,400  
     Buildings and equipment, net   19,600     19,400  
             
  Total property and equipment   26,000     25,800  
             
  Total assets $ 56,784   $ 52,040  
             
  Liabilities and Stockholders' Equity            
  Current liabilities:            
     Accounts payable $ 9,900   $ 8,500  
     Accrued liabilities   680     900  
     Notes payable, short term   340     340  
             
  Total current liabilities   10,920     9,740  
  Long-term liabilities:            
     Bonds payable   10,000     10,000  
             
  Total liabilities   20,920     19,740  
             
  Stockholders' equity:            
     Common stock   840     840  
     Additional paid-in capital   4,400     4,400  
             
       Total paid-in capital   5,240     5,240  
       Retained earnings   30,624     27,060  
             
  Total stockholders' equity   35,864     32,300  
             
  Total liabilities and stockholders' equity $ 56,784   $ 52,040  
             
 

 

Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
  This Year Last Year
  Sales $ 83,000   $ 78,000  
  Cost of goods sold   54,000     50,000  
             
  Gross margin   29,000     28,000  
 

 

 

 

 

 

 

  Selling and administrative expenses:            
     Selling expenses   8,900     8,400  
     Administrative expenses   12,400     11,400  
             
  Total selling and administrative expenses   21,300     19,800  
             
  Net operating income   7,700     8,200  
  Interest expense   1,200     1,200  
             
  Net income before taxes   6,500     7,000  
  Income taxes   2,600     2,800  
             
  Net income   3,900     4,200  
  Dividends to common stockholders   336     630  
             
  Net income added to retained earnings   3,564     3,570  
  Beginning retained earnings   27,060     23,490  
             
  Ending retained earnings $ 30,624   $ 27,060  
             
 
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