ezto.mheducation.com Ch d Adobe Fla canmedia mheducation.ca Comparative financia
ID: 2574102 • Letter: E
Question
ezto.mheducation.com Ch d Adobe Fla canmedia mheducation.ca 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 950,000 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 $26. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet dollars in thousands) This Year Last Year Assets Current assets: $ 770 1,810 15,900 9,000 10,450 8,800 1,950 2,400 Cash Accounts receivable, net Prepaid expenses Total current assets 29,070 22,010 Property and equipment: 7,500 7,500 20,700 20,500 Land Buildings and equipment, net Total property and equipment Total assets Liabilities and Stockholders' Equity 28,200 28,000 $57 270 $50,010 Current liabilities: Accounts payable Accrued liabilities $11,000 $ 9,050 900 1,450 450 Notes payable, short term Total current liabilities Long-term liabilities: Bonds payable 12,350 10,950 5,000 5,000 17,350 15,950 Total liabilities Stockholders' equity Common stock 950 950 Additional paid-in capital 4,950 4,950 5,900 5,900 Total paid-in capital Retained earnings 34,020 28,160 39,92034,060 $57,270 $50,010 Total stockholders' equity Total liabilities and stockholders' equityExplanation / Answer
return on total assets
net income/average total assets
11.63%
net income
6240
average total assets
(57270+50010)/2
53640
Return on equity
net income/average equity
16.87%
net income
6240
average equity
(39920+34060)/2
36990
return on total assets
net income/average total assets
11.63%
net income
6240
average total assets
(57270+50010)/2
53640
Return on equity
net income/average equity
16.87%
net income
6240
average equity
(39920+34060)/2
36990
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