stockholders’ equity
Income Statement
For the Year Ended December 31,
Year 2
(in thousands of dollars)
Sales (all on account)
$1,310
Cost of goods sold
780
Gross margin
530
Selling and administrative
expense
359
Net operating income
171
Interest expense
35
Net income before taxes
136
Income taxes (30%)
41
Net income
$95
The inventory turnover for Year 2 is closest to:
13–406
13–407
Freiman Corporation’s most recent balance sheet and income statement appear below:
Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
Assets
Year 2
Year
1
Current assets:
Cash
$160
$120
Accounts receivable
220
240
Inventory
120
130
Prepaid expenses
40
40
Total current assets
540
530
Plant and equipment,
net
700
700
Total assets
$1,240
$1,230
Liabilities and
Stockholders’ Equity
Current liabilities:
Accounts payable
$130
$150
Accrued liabilities
90
90
Notes payable, short
term
60
70
Total current liabilities
280
310
Bonds payable
280
290
Total liabilities
560
600
Stockholders’ equity:
Common stock, $2
par value
100
100
Additional paid-in
capital-common stock
200
200
Retained earnings
380
330
Total stockholders’
equity
680
630
Total liabilities &
$1,240
$1,230
stockholders’ equity
Income Statement
For the Year Ended December 31,
Year 2
(in thousands of dollars)
Sales (all on account)
$1,310
Cost of goods sold
780
Gross margin
530
Selling and administrative
expense
359
Net operating income
171
Interest expense
35
Net income before taxes
136
Income taxes (30%)
41
Net income
$95
The average sale period for Year 2 is closest to:
Data from Dunshee Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$130
$100
Accounts receivable
270
290
Inventory
90
110
Prepaid expenses
10
10
Total current assets
$500
$510
Total current
liabilities
$230
$220
Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.
The working capital at the end of Year 2 is:
Data from Dunshee Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$130
$100
Accounts receivable
270
290
Inventory
90
110
Prepaid expenses
10
10
Total current assets
$500
$510
Total current
liabilities
$230
$220
Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.
The current ratio at the end of Year 2 is closest to:
Data from Dunshee Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$130
$100
Accounts receivable
270
290
Inventory
90
110
Prepaid expenses
10
10
Total current assets
$500
$510
Total current
liabilities
$230
$220
Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.
The acid-test ratio at the end of Year 2 is closest to:
Data from Dunshee Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$130
$100
Accounts receivable
270
290
Inventory
90
110
Prepaid expenses
10
10
Total current assets
$500
$510
Total current
liabilities
$230
$220
Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.
The average collection period for Year 2 is closest to:
Data from Dunshee Corporation’s most recent balance sheet appear below:
Year 2
Year 1
Current assets:
Cash
$130
$100
Accounts receivable
270
290
Inventory
90
110
Prepaid expenses
10
10
Total current assets
$500
$510
Total current
liabilities
$230
$220
Sales on account in Year 2 amounted to $1,170 and the cost of goods sold was $730.
The average sale period for Year 2 is closest to:
13–414
Financial statements for Maraby Corporation appear below:
Maraby Corporation
Balance Sheet
December 31, Year 2 and Year 1
(dollars in thousands)
Year
2
Year
1
Current assets:
Cash and marketable
securities
$220
$190
Accounts receivable,
net
190
160
Inventory
140
150
Prepaid expenses
70
80
Total current assets
620
580
Noncurrent assets:
Plant & equipment,
net
1,180
1,150
Total assets
$1,800
$1,730
Current liabilities:
Accounts payable
$100
$120
Accrued liabilities
100
70
Notes payable, short
term
160
160
Total current liabilities
360
350
Noncurrent liabilities:
Bonds payable
450
500
Total liabilities
810
850
Stockholders’ equity:
Common stock, $5 par
160
160
Additional paid-in
capital-common stock
200
200
Retained earnings
630
520
Total stockholders’
equity
990
880
Total liabilities &
stockholders’ equity
$1,800
$1,730
Maraby Corporation
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account)
$1,960
Cost of goods sold
1,370
Gross margin
590
Selling and administrative expense
230
Net operating income
360
Interest expense
50
Net income before taxes
310
Income taxes (30%)
93
Net income
$217
Maraby Corporation’s working capital (in thousands of dollars) at the end of Year 2 was
closest to:
13–416
13–417
Financial statements for Maraby Corporation appear below:
Maraby Corporation
Balance Sheet
December 31, Year 2 and Year 1
(dollars in thousands)
Year 2
Year
1
Current assets:
Cash and marketable
securities
$220
$190
Accounts receivable,
net
190
160
Inventory
140
150
Prepaid expenses
70
80
Total current assets
620
580
Noncurrent assets:
Plant & equipment,
net
1,180
1,150
Total assets
$1,800
$1,730
Current liabilities:
Accounts payable
$100
$120
Accrued liabilities
100
70
Notes payable, short
term
160
160
Total current liabilities
360
350
Noncurrent liabilities:
Bonds payable
450
500
Total liabilities
810
850
Stockholders’ equity:
Common stock, $5
par
160
160
Additional paid-in
capital-common stock
200
200
Retained earnings
630
520
Total stockholders’
equity
990
880
Total liabilities &
stockholders’ equity
$1,800
$1,730
Maraby Corporation
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account)
$1,960
Cost of goods sold
1,370
Gross margin
590
Selling and administrative expense
230
Net operating income
360
Interest expense
50
Net income before taxes
310
Income taxes (30%)
93
Net income
$217
Maraby Corporation’s current ratio at the end of Year 2 was closest to:
13–419
13–420
Financial statements for Maraby Corporation appear below:
Maraby Corporation
Balance Sheet
December 31, Year 2 and Year 1
(dollars in thousands)
Year 2
Year
1
Current assets:
Cash and marketable
securities
$220
$190
Accounts receivable,
net
190
160
Inventory
140
150
Prepaid expenses
70
80
Total current assets
620
580
Noncurrent assets:
Plant & equipment,
net
1,180
1,150
Total assets
$1,800
$1,730
Current liabilities:
Accounts payable
$100
$120
Accrued liabilities
100
70
Notes payable, short
term
160
160
Total current liabilities
360
350
Noncurrent liabilities:
Bonds payable
450
500
Total liabilities
810
850
Stockholders’ equity:
Common stock, $5
par
160
160
Additional paid-in
capital-common stock
200
200
Retained earnings
630
520
Total stockholders’
equity
990
880
Total liabilities &
stockholders’ equity
$1,800
$1,730
Maraby Corporation
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account)
$1,960
Cost of goods sold
1,370
Gross margin
590
Selling and administrative expense
230
Net operating income
360
Interest expense
50
Net income before taxes
310
Income taxes (30%)
93
Net income
$217
Maraby Corporation’s acid-test ratio at the end of Year 2 was closest to:
13–422
13–423
Financial statements for Maraby Corporation appear below:
Maraby Corporation
Balance Sheet
December 31, Year 2 and Year 1
(dollars in thousands)
Year 2
Year 1
Current assets:
Cash and marketable
securities
$220
$190
Accounts receivable,
net
190
160
Inventory
140
150
Prepaid expenses
70
80
Total current assets
620
580
Noncurrent assets:
Plant & equipment,
net
1,180
1,150
Total assets
$1,800
$1,730
Current liabilities:
Accounts payable
$100
$120
Accrued liabilities
100
70
Notes payable, short
term
160
160
Total current liabilities
360
350
Noncurrent liabilities:
Bonds payable
450
500
Total liabilities
810
850
Stockholders’ equity:
Common stock, $5
par
160
160
Additional paid-in
capital-common stock
200
200
Retained earnings
630
520
Total stockholders’
equity
990
880
Total liabilities &
stockholders’ equity
$1,800
$1,730
Maraby Corporation
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
Sales (all on account)
$1,960
Cost of goods sold
1,370
Gross margin
590
Selling and administrative expense
230
Net operating income
360
Interest expense
50
Net income before taxes
310
Income taxes (30%)
93
Net income
$217
Maraby Corporation’s accounts receivable turnover for Year 2 was closest to: