111. King Products Corporation
King Products Corporation
Statement of Financial Position
(in thousands)
|
|
|
|
|
|
Cash
|
$ 60
|
$ 50
|
Marketable securities (at market)
|
40
|
30
|
Accounts receivable (net)
|
90
|
60
|
Inventories (at lower of cost or market)
|
120
|
100
|
Prepaid items
|
|
|
Total current assets
|
|
|
Long-term investments (at cost)
|
50
|
40
|
Land (at cost)
|
150
|
150
|
Building (net)
|
160
|
180
|
Equipment (net)
|
190
|
200
|
Patents (net)
|
70
|
34
|
Goodwill (net)
|
|
|
Total long-term assets
|
|
|
Total assets
|
|
|
Notes payable
|
$ 46
|
$ 24
|
Accounts payable
|
94
|
56
|
Accrued interest
|
|
|
Total current liabilities
|
|
|
Notes payable, 10% due 12/31/Year 12
|
20
|
20
|
Bonds payable, 12% due 6/30/Year 15
|
|
|
Total long-term debt
|
|
|
Total liabilities
|
|
|
Preferred stock-5% cumulative, $100 par, non-participating, authorized, issued and outstanding, 2,000 shares
|
200
|
200
|
Common stock-$10 par, 40,000 shares authorized, 30,000 shares issued and outstanding
|
300
|
300
|
Additional paid-in capital--common
|
150
|
150
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
King Products Corporation
Income Statement
For the year ended June 30
(in thousands)
|
|
|
|
Net sales
|
$600
|
Costs and expenses
|
|
Cost of goods sold
|
440
|
Selling, general, and administrative
|
60
|
Interest expense
|
|
Income before taxes
|
$ 90
|
Income taxes
|
|
Net income
|
|
|
|
|
|
(CMA adapted, Dec 96 #17) Refer to the King Products Corporation example. King Products Corporation's average collection period for the fiscal year ended at June 30, Year 6, using a 360-day year, was.
A. 36 days
45 days
C. 54 days
D. 61 days
E. none of the above
112. King Products Corporation
King Products Corporation
Statement of Financial Position
(in thousands)
|
|
|
|
|
|
Cash
|
$ 60
|
$ 50
|
Marketable securities (at market)
|
40
|
30
|
Accounts receivable (net)
|
90
|
60
|
Inventories (at lower of cost or market)
|
120
|
100
|
Prepaid items
|
|
|
Total current assets
|
|
|
Long-term investments (at cost)
|
50
|
40
|
Land (at cost)
|
150
|
150
|
Building (net)
|
160
|
180
|
Equipment (net)
|
190
|
200
|
Patents (net)
|
70
|
34
|
Goodwill (net)
|
|
|
Total long-term assets
|
|
|
Total assets
|
|
|
Notes payable
|
$ 46
|
$ 24
|
Accounts payable
|
94
|
56
|
Accrued interest
|
|
|
Total current liabilities
|
|
|
Notes payable, 10% due 12/31/Year 12
|
20
|
20
|
Bonds payable, 12% due 6/30/Year 15
|
|
|
Total long-term debt
|
|
|
Total liabilities
|
|
|
Preferred stock-5% cumulative, $100 par, non-participating, authorized, issued and outstanding, 2,000 shares
|
200
|
200
|
Common stock-$10 par, 40,000 shares authorized, 30,000 shares issued and outstanding
|
300
|
300
|
Additional paid-in capital--common
|
150
|
150
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
King Products Corporation
Income Statement
For the year ended June 30
(in thousands)
|
|
|
|
Net sales
|
$600
|
Costs and expenses
|
|
Cost of goods sold
|
440
|
Selling, general, and administrative
|
60
|
Interest expense
|
|
Income before taxes
|
$ 90
|
Income taxes
|
|
Net income
|
|
|
|
|
|
(CMA adapted, Dec 96 #18) Refer to the King Products Corporation example. King Products Corporation's quick (acid test) ratio at June 30, Year 6, was
A. 0.6
1.1
C. 1.8
D. 2.0
E. none of the above
113. Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash
|
$ 45
|
$ 38
|
Trading securities
|
30
|
20
|
Accounts receivable (net)
|
68
|
48
|
Inventories
|
90
|
80
|
Prepaid expenses
|
|
|
Total current assets
|
$255
|
$216
|
Investments, at equity
|
38
|
30
|
Property, plant, and equipment (net)
|
375
|
400
|
Intangible assets (net)
|
|
|
Total assets
|
|
|
Liabilities and shareholders' equity
|
|
|
Current liabilities
|
|
|
Notes payable
|
$ 35
|
$ 18
|
Accounts payable
|
70
|
42
|
Accrued expenses
|
5
|
4
|
Income taxes payable
|
|
|
Total current liabilities
|
125
|
80
|
Long-term debt
|
35
|
35
|
Deferred taxes
|
|
|
Total liabilities
|
|
|
Shareholders' equity
|
|
|
Preferred stock, 6%, $100 par value, cumulative
|
150
|
150
|
Common stock, $10 par value
|
225
|
195
|
Additional paid-in capital-common stock
|
114
|
100
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
|
|
|
|
|
|
Net sales
|
$480
|
$460
|
Costs and expenses
|
|
|
Cost of goods sold
|
330
|
315
|
Selling, general, and administrative
|
52
|
51
|
Interest expense
|
|
|
Income before taxes
|
$ 90
|
$ 85
|
Income taxes
|
|
|
Net income
|
|
|
|
|
|
|
|
|
(CMA adapted, Jun 97 #13) Refer to the Devlin Company example. Devlin Company's acid-test ratio at May 31, Year 7, was
A. 0.60 to 1
B. 0.90 to 1
1.14 to 1
D. 1.86 to 1
E. 2.14 to 1
114. Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash
|
$ 45
|
$ 38
|
Trading securities
|
30
|
20
|
Accounts receivable (net)
|
68
|
48
|
Inventories
|
90
|
80
|
Prepaid expenses
|
|
|
Total current assets
|
$255
|
$216
|
Investments, at equity
|
38
|
30
|
Property, plant, and equipment (net)
|
375
|
400
|
Intangible assets (net)
|
|
|
Total assets
|
|
|
Liabilities and shareholders' equity
|
|
|
Current liabilities
|
|
|
Notes payable
|
$ 35
|
$ 18
|
Accounts payable
|
70
|
42
|
Accrued expenses
|
5
|
4
|
Income taxes payable
|
|
|
Total current liabilities
|
125
|
80
|
Long-term debt
|
35
|
35
|
Deferred taxes
|
|
|
Total liabilities
|
|
|
Shareholders' equity
|
|
|
Preferred stock, 6%, $100 par value, cumulative
|
150
|
150
|
Common stock, $10 par value
|
225
|
195
|
Additional paid-in capital-common stock
|
114
|
100
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
|
|
|
|
|
|
Net sales
|
$480
|
$460
|
Costs and expenses
|
|
|
Cost of goods sold
|
330
|
315
|
Selling, general, and administrative
|
52
|
51
|
Interest expense
|
|
|
Income before taxes
|
$ 90
|
$ 85
|
Income taxes
|
|
|
Net income
|
|
|
|
|
|
|
|
|
(CMA adapted, Jun 97 #14) Refer to the Devlin Company example. Assuming there are no preferred stock dividends in arrears, Devlin Company's return on common shareholders' equity for the year ended May 31, Year 7, was
A. 6.3 percent
B. 7.5 percent
C. 7.8 percent
10.5 percent
E. 15.5 percent
115. Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash
|
$ 45
|
$ 38
|
Trading securities
|
30
|
20
|
Accounts receivable (net)
|
68
|
48
|
Inventories
|
90
|
80
|
Prepaid expenses
|
|
|
Total current assets
|
$255
|
$216
|
Investments, at equity
|
38
|
30
|
Property, plant, and equipment (net)
|
375
|
400
|
Intangible assets (net)
|
|
|
Total assets
|
|
|
Liabilities and shareholders' equity
|
|
|
Current liabilities
|
|
|
Notes payable
|
$ 35
|
$ 18
|
Accounts payable
|
70
|
42
|
Accrued expenses
|
5
|
4
|
Income taxes payable
|
|
|
Total current liabilities
|
125
|
80
|
Long-term debt
|
35
|
35
|
Deferred taxes
|
|
|
Total liabilities
|
|
|
Shareholders' equity
|
|
|
Preferred stock, 6%, $100 par value, cumulative
|
150
|
150
|
Common stock, $10 par value
|
225
|
195
|
Additional paid-in capital-common stock
|
114
|
100
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
|
|
|
|
|
|
Net sales
|
$480
|
$460
|
Costs and expenses
|
|
|
Cost of goods sold
|
330
|
315
|
Selling, general, and administrative
|
52
|
51
|
Interest expense
|
|
|
Income before taxes
|
$ 90
|
$ 85
|
Income taxes
|
|
|
Net income
|
|
|
|
|
|
|
|
|
(CMA adapted, Jun 97 #18) Refer to the Devlin Company example. Devlin Company's times interest earned for the year ended May 31, Year 7, was
A. 6.75 times
B. 11.25 times
12.25 times
D. 18.75 times
E. 20.75 times
116. Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash
|
$ 45
|
$ 38
|
Trading securities
|
30
|
20
|
Accounts receivable (net)
|
68
|
48
|
Inventories
|
90
|
80
|
Prepaid expenses
|
|
|
Total current assets
|
$255
|
$216
|
Investments, at equity
|
38
|
30
|
Property, plant, and equipment (net)
|
375
|
400
|
Intangible assets (net)
|
|
|
Total assets
|
|
|
Liabilities and shareholders' equity
|
|
|
Current liabilities
|
|
|
Notes payable
|
$ 35
|
$ 18
|
Accounts payable
|
70
|
42
|
Accrued expenses
|
5
|
4
|
Income taxes payable
|
|
|
Total current liabilities
|
125
|
80
|
Long-term debt
|
35
|
35
|
Deferred taxes
|
|
|
Total liabilities
|
|
|
Shareholders' equity
|
|
|
Preferred stock, 6%, $100 par value, cumulative
|
150
|
150
|
Common stock, $10 par value
|
225
|
195
|
Additional paid-in capital-common stock
|
114
|
100
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
|
|
|
|
|
|
Net sales
|
$480
|
$460
|
Costs and expenses
|
|
|
Cost of goods sold
|
330
|
315
|
Selling, general, and administrative
|
52
|
51
|
Interest expense
|
|
|
Income before taxes
|
$ 90
|
$ 85
|
Income taxes
|
|
|
Net income
|
|
|
|
|
|
|
|
|
(CMA adapted, Jun 97 #15) Refer to the Devlin Company example. Devlin Company's inventory turnover for the year ended May 31, Year 7, was
A. 3.67 times
3.88 times
C. 5.33 times
D. 5.65 times
E. 5.95 times
117. Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash
|
$ 45
|
$ 38
|
Trading securities
|
30
|
20
|
Accounts receivable (net)
|
68
|
48
|
Inventories
|
90
|
80
|
Prepaid expenses
|
|
|
Total current assets
|
$255
|
$216
|
Investments, at equity
|
38
|
30
|
Property, plant, and equipment (net)
|
375
|
400
|
Intangible assets (net)
|
|
|
Total assets
|
|
|
Liabilities and shareholders' equity
|
|
|
Current liabilities
|
|
|
Notes payable
|
$ 35
|
$ 18
|
Accounts payable
|
70
|
42
|
Accrued expenses
|
5
|
4
|
Income taxes payable
|
|
|
Total current liabilities
|
125
|
80
|
Long-term debt
|
35
|
35
|
Deferred taxes
|
|
|
Total liabilities
|
|
|
Shareholders' equity
|
|
|
Preferred stock, 6%, $100 par value, cumulative
|
150
|
150
|
Common stock, $10 par value
|
225
|
195
|
Additional paid-in capital-common stock
|
114
|
100
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
|
|
|
|
|
|
Net sales
|
$480
|
$460
|
Costs and expenses
|
|
|
Cost of goods sold
|
330
|
315
|
Selling, general, and administrative
|
52
|
51
|
Interest expense
|
|
|
Income before taxes
|
$ 90
|
$ 85
|
Income taxes
|
|
|
Net income
|
|
|
|
|
|
|
|
|
(CMA adapted, Jun 97 #16) Refer to the Devlin Company example. Devlin Company's asset turnover for the year ended May 31, Year 7, was
A. 0.08 times
B. 0.46 times
0.67 times
D. 0.73 times
E. 0.93 times
118. Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
|
|
|
Assets
|
|
|
Current assets
|
|
|
Cash
|
$ 45
|
$ 38
|
Trading securities
|
30
|
20
|
Accounts receivable (net)
|
68
|
48
|
Inventories
|
90
|
80
|
Prepaid expenses
|
|
|
Total current assets
|
$255
|
$216
|
Investments, at equity
|
38
|
30
|
Property, plant, and equipment (net)
|
375
|
400
|
Intangible assets (net)
|
|
|
Total assets
|
|
|
Liabilities and shareholders' equity
|
|
|
Current liabilities
|
|
|
Notes payable
|
$ 35
|
$ 18
|
Accounts payable
|
70
|
42
|
Accrued expenses
|
5
|
4
|
Income taxes payable
|
|
|
Total current liabilities
|
125
|
80
|
Long-term debt
|
35
|
35
|
Deferred taxes
|
|
|
Total liabilities
|
|
|
Shareholders' equity
|
|
|
Preferred stock, 6%, $100 par value, cumulative
|
150
|
150
|
Common stock, $10 par value
|
225
|
195
|
Additional paid-in capital-common stock
|
114
|
100
|
Retained earnings
|
|
|
Total shareholders' equity
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
|
|
|
|
|
|
Net sales
|
$480
|
$460
|
Costs and expenses
|
|
|
Cost of goods sold
|
330
|
315
|
Selling, general, and administrative
|
52
|
51
|
Interest expense
|
|
|
Income before taxes
|
$ 90
|
$ 85
|
Income taxes
|
|
|
Net income
|
|
|
|
|
|
|
|
|
(CMA adapted, Jun 97 #17) Refer to the Devlin Company example. Devlin Company's rate of return on assets for the year ended May 31, Year 7, was
A. 7.2 percent
B. 7.5 percent
8.2 percent
D. 11.2 percent
E. 11.9 percent
119. A firm desires to increase its ratio of cash flow from operations divided by average current liabilities from its anticipated level of 30 percent for the coming year to a more desirable level of 40 percent. Which of the following actions is consistent with this increase?
A. increase short-term bank borrowing
decrease the number of days that accounts receivable are outstanding
C. decrease the number of days accounts payable are outstanding
D. increase the number of days inventories are held
E. none of the above
120. A steel manufacturer experienced a decrease in its fixed asset turnover from .9 in Year 5 to .7 in Year 6. This change is consistent with which of the following explanations?
A. The firm sold a fully-depreciated factory on January 1, Year 6 that had been closed in Year 4 and held for sale since then.
B. The steel industry operated at capacity during Year 6, permitting all firms to raise selling prices.
C. The firm recognized an impairment loss on a factory that became obsolete during Year 6 because of new environmental regulations.
The firm decreased the number of units produced and sold because of an inability to obtain needed raw materials.
E. none of the above