A partial balance sheet and income statement for King Corporation follow: KING CORPORATION Partial Balance Sheet December

Question:

A partial balance sheet and income statement for King Corporation follow:

KING CORPORATION

Partial Balance Sheet

December 31, 2009

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

KING CORPORATION

Partial Income Statement

For Year Ended December 31, 2009

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

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

Accounts Payable
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