Please help me solve these practice problems! Show work so I can solve the real
ID: 2453366 • Letter: P
Question
Please help me solve these practice problems! Show work so I can solve the real problems! Thank you in advance!
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 a total of 800,000 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 $1.25 last year and S0.90 this year. The market value of the companys common stock at the end of the year was S28. All of the company's sales are on account. ppear below. The compan y did not issue any new common stock during the year Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year t assets: Cash Accounts receivable, net Inventory Prepaid expenses S 1,240 S1,250 13,100 11,300 800 Total current assets 24,540 19,80 Property and equipment: Land 10,100 10,100 Buildings and equipment, net 42,050 39,230 52,150 49,330 S76,690 S69,010 Total property and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: S20,400 S18,100 Accounts payable Accrued liabilities Notes payable, short term Total current liabilitie Long-term liabilities: 21,410 19,040 9,000 9,000 Bonds payable Total liabilities Stockholders' equity: 30,410 28,040 2,000 4,000 2,000 4,000 stock Additional paid-in capital Total paid-in capital Retained earnings 40,280 34,970 40,970 S76,690 S69,010 Total stockholders equity 46,280 Total liabilities and stockholders equity Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year S71,000 S65,000 42,000 39,000 Cost of goods sold Gross margin 29,000 28,000 Sellinga Selling expenses Administrative expenses 11,400 8,600 10,900 8,400 18,000 7,00 8,700 Total selling and administrative expenses Net operating income Interest expense 11,000 900 900 Net income before taxes Income taxes 7,800 10,100 4,040 Net income Dividends to common stockholders 8,080 750 4,680 750 Net income added to retained earnings Beginning retained earnings 34,970 31.040 Ending retained earnings S40,280 S34,970 Compute the following financial ratios for this year 1. Times interest earned ratio. (Round your answer to 1 decimal place.) interest earned ratio 2. Debt-to-equity ratio. (Round your answer to 2 decimal places.) 3. Equity multiplier. (Round your answer to 2 decimal places.]Explanation / Answer
Details Ratio 1 Times Interest Earned ratio= Income before Interest & taxes/ Interest Expense =11000/900 12.22 2 Debt To Equity ratio=Long Term Debt/Shareholders Equity=9000/46280 0.194 3 Equity Multiplier = Total Assets/Total Stockholders equity =76690/46280 1.657