The Following Are the Income Statements and Balance Sheets for Goal

question 10

Multiple Choice

The following are the income statements and balance sheets for Goal Company: $\begin{array}{lr}&20X2\\\text { Sales only credit sales) }&\$1,606.0\\\text {Less cost of goods sold }&1,062.0\\\text {Gross profit }&\$544.0\\\text {Less operating expenses }&322.0\\\text {Operating income }&\$222.0\\\text { Less other expense: Interest}&9.6\\\text {Income before tax }&\$212.4\\\text {Less income tax expense }&85.0\\\text { Net income}&\$127.4\\\end{array}$


$\begin{array}{lrrlrr}&20X2&20X1&&20X2&20X1\\\text { Current assets: } &&&{\text { Current liabilities: }} \\\text { Cash } & \$ 36 & \$ 38 & \text { Accts payable } & \$ 98 & \$ 64 \\\text { Accts receivable } & 180 & 144 & \text { Wages payable } & 18 & 16 \\\text { Inventory } & 120 & 100 & \text { Taxes payable } & 28 & 4 \\\text { Prepaid rent } & 20 & 24 & \text { Current portion } & &\\\text { Total current assets }&\$356&\$306&\text { of long-term debt }&30&6\\\text { Long-term assets: } & & & \text { Total current } & & \\\text { Fixed assets } & \$ 320 & \$ 316 & \text { liabilities } & \$ 174 & \$ 90 \\\text { Accum. deprec. } & \underline{206}) & \underline{180}) & \text { Long-term liabilities } & \underline{66} & \underline{92}\\\text { Total long-term assets }&\$114&\$136&\text { Total liabilities }&\$240&\$182\\&&&\text { Owners' equity: }\\&&&\text { Common stock, } \$ 5 \text { par }&\$80&\$80\\&&&\text { Retained income } & 150 & 180\\&&&\text { Total owners' equity }&\$230&\$260\\\text { Total assets }&\$470&\$442&\text { Total liab. and own. equity }&\$470&\$442\\\\\end{array}$
$\text {December 31 market price per share:}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\$120\quad\quad\$106$ The average collection period in days for Goal Company in 20X2 is _____days.

• A)5.0
• B)36.8
• C)464.1
• D)40.9

---

Definitions:

Necessary Indorsement

An endorsement required to transfer the rights of a negotiable instrument to another party in the course of business transactions.

Dishonor

The refusal or inability of a party to honor a financial obligation or instrument, such as a check or bill of exchange, when presented for payment.

Notice Of Dishonor

A formal notification indicating that a payment instrument, such as a check or bill of exchange, has been presented for payment and refused.

Potential Liability

A legal obligation that might occur in the future, depending on the outcome of a particular event.