Reference: 13-07
Financial Statements for Orantes Company Appear Below:
Orantes

question 11

Multiple Choice

Reference: 13-07
Financial statements for Orantes Company appear below:
Orantes Company
Balance Sheet
December 31, 20X6 and 20X5
(dollars in thousands) $\begin{array}{|l|l|l|}\hline & 20 X 6 & 20 X 5 \\\hline \text { Current assets: } & & \\\hline \text { Cash and marketable securities } & \$ 120 & \$ 100 \\\hline \text { Accounts receivable, net } & 180 & 160 \\\hline \text { Inventory } & 130 & 130 \\\hline \text { Prepaid expenses } & 50 & 50 \\\hline \text { Total current assets } & 480 & 440 \\\hline \text { Noncurrent assets: } & & \\\hline \text { Plant \& equipment, net } & 2,010 & 1,970 \\\hline \text { Total assets } & \$ 2,490 & \$ 2,410 \\\hline & & \\\hline \text { Current liabilities: } & & \\\hline \text { Accounts payable } & \$ 120 & \$ 120 \\\hline \text { Accrued liabilities } & 30 & 40 \\\hline \text { Notes payable, short term } & 170 & 170 \\\hline \text { Total current liabilities } & 320 & 330 \\\hline \text { Noncurrent liabilities: } & & \\\hline \text { Bonds payable } & 270 & 300 \\\hline \text { Total liabilities } & 590 & 630 \\\hline \text { Shareholders' equity: } & & \\\hline \text { Preferred shares, \$10 par, 10\% } & 120 & 120 \\\hline \text { Common shares, \$10 par } & 200 & 200 \\\hline \text { Additional paid-in capital--common shares } & 270 & 270 \\\hline\end{array}$ Orantes Company
Income Statement
For the Year Ended December 31, 20X6 (dollars in thousands) $$\begin{array} { | l | r | } \hline \text { Sales (all on account) } & \$ 2,510 \\\hline \text { Cost of goods sold } & 1,750 \\\hline \text { Gross margin } & 760 \\\hline \text { Operating expenses } & 300 \\\hline \text { Net operating income } & 460 \\\hline \text { Interest expense } & 30 \\\hline \text { Net income before taxes } & 430 \\\hline \text { Income taxes (30\%) } & 129 \\\hline \text { Net income } & \$ 301 \\\hline\end{array}$$ Dividends during 20X6 totalled $181 thousand, of which $12 thousand were preferred dividends. The market price of a share of common stock on December 31, 20X6 was $280.
-Frabine Company had $150,000 in sales on account last year. receivable balance was $14,000 and the ending accounts receivable balance was
$18,000. The company's accounts receivable turnover was closest to:

• A)8.33 times.
• B)4.69 times.
• C)9.38 times.
• D)10.71 times.

Recognize the situations where marketing research might not be valuable and learn the steps to avoid ineffective market research activities.

Understand the concept of mechanisms in different contexts, including psychological, biological, and physiological systems.

Grasp the functional innervation of organs by the sympathetic and parasympathetic nervous system.

Recognize the role of stress-related hormones in physical health conditions such as obesity.

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Definitions:

Accounts Payable

The amounts a company owes to its suppliers or vendors for goods or services received but not yet paid for; a liability on the balance sheet.

Collections Float

Float created while funds from customers’ cheques are being deposited and cleared through the cheque collection process.

Disbursement Float

Float created before cheques written by a firm have cleared and been deducted from the firm’s account. Disbursement float causes the firm’s own cheque-book balance to be smaller than the balance on the bank’s records.

Net Float

The difference between a firm’s disbursement float and collections float.