Question - A Partial balance sheet and income statement for King Corporation follow:
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King Corporation Partial Balance Sheet 31-Dec-07
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Assets
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Current Assets
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Cash
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$33,493
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Marketable securities
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215,147
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Trade receivables, less allowance of $6,000
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255,000
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Inventories, LIFO
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523,000
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Prepaid Expenses
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26,180
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Total Current Assets
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$1,052,820
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Liabilities
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Current liabilities:
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Trade Accounts payable
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$103,689
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Notes payable(primarily to banks) and commercial paper
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210,381
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Accured expenses and other liabilities
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120,602
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Income taxes payable
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3,120
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Current maturities of long-term debt
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22,050
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Total current liabilities
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$459,842
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King Corporation Partical Income Statement For Year Ended December 31, 2007
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Net Sales
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$3,050,600
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Miscellaneous income
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45,060
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$3,095,660
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Cost and expenses:
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Cost of Sales
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$2,185,100
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Selling, general, and administrative expenses
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350,265
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Interest expense
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45,600
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Income Taxes
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300,000
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$2,880,965
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Net Income
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$214,695
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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