Comparative financial statements for Weller Corporation

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 500,000 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 $0.50. The market value of the company’s common stock at the end of the year was $25. 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

$

1,130

$

1,340

     Accounts receivable, net

10,500

6,700

     Inventory

12,800

11,800

     Prepaid expenses

770

570

  Total current assets

25,200

20,410

  Property and equipment:

     Land

10,400

10,400

     Buildings and equipment, net

41,440

36,670

  Total property and equipment

51,840

47,070

  Total assets

$

77,040

$

67,480

  Liabilities and Stockholders' Equity

  Current liabilities:

     Accounts payable

$

20,400

$

17,500

     Accrued liabilities

900

770

     Notes payable, short term

160

160

  Total current liabilities

21,460

18,430

  Long-term liabilities:

     Bonds payable

10,000

10,000

  Total liabilities

31,460

28,430

  Stockholders' equity:

     Common stock

500

500

     Additional paid-in capital

4,000

4,000

       Total paid-in capital

4,500

4,500

       Retained earnings

41,080

34,550

  Total stockholders' equity

45,580

39,050

  Total liabilities and stockholders' equity

$

77,040

$

67,480

Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)

This Year

Last Year

  Sales

$

67,000

$

65,000

  Cost of goods sold

37,000

40,000

  Gross margin

30,000

25,000

  Selling and administrative expenses:

  Selling expenses

10,800

10,500

  Administrative expenses

6,900

6,400

  Total selling and administrative expenses

17,700

16,900

  Net operating income

12,300

8,100

  Interest expense

1,000

1,000

  Net income before taxes

11,300

7,100

  Income taxes

4,520

2,840

  Net income

6,780

4,260

  Dividends to common stockholders

250

250

  Net income added to retained earnings

6,530

4,010

  Beginning retained earnings

34,550

30,540

  Ending retained earnings

$

41,080

$

34,550

Required:

Compute the following financial data and ratios for this year:

1.

Working capital.

2.

Current ratio. (Round your answer to 2 decimal places.)

3.

Acid-test ratio. (Round your answer to 2 decimal places.)