A partial balance sheet and income statement for the King Corporation are shown below and on the next page.
| KING CORPORATION Don't use plagiarized sources. Get Your Custom Essay on a partial balance sheet and income statement for the king corporation are shown belo 544349 For $10/Page 0nly | |
| Assets | |
| Current assets: | |
| Cash | $ 33,493 |
| Marketable securities | 215,147 |
| Trade receivables, less allowance of $6,000 | 255,000 |
| Inventories, LIFO | 523,000 |
| Prepaid expenses | 26,180 |
| Total current assets | $1,052,820 |
| Liabilities | |
| Current liabilities: | |
| Trade accounts payable | $ 103,689 |
| Notes payable (primarily to banks) and commercial paper | 210,381 |
| Accrued expenses and other liabilities | 120,602 |
| Income taxes payable | 3,120 |
| Current maturities of long-term debt | 22,050 |
| Total current liabilities | $ 459,842 |
Required Compute the following:
a. Working capital.
b. Current ratio
c. Acid-test ratio
d. Cash ratio
e. Days’ sales in receivables
f. Accounts receivable turnover in days
g. Days’ sales in inventory
h. Inventory turnover in days
i. Operating cycle
| KING CORPORATION | |
| Net sales | $3,050,600 |
| Miscellaneous income | 45,060 |
| $3,095,660 | |
| Costs and expenses: | |
| Cost of sales | 2,185,100 |
| Selling, general, and administrative expenses | 350,265 |
| Interest expense | 45,600 |
| Income taxes | 300,000 |
| 2,880,965 | |
| Net income | $ 214,695 |
Note: The trade receivables at December 31, 2000, were $280,000, net of an allowance of $8,000, for a gross receivables figure of $288,000. The inventory at
December 31, 2000, was $565,000.
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