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Pettijohn Inc  Balance Shet (Millions of $ ) \text { Balance Shet (Millions of } \$ \text { ) }

question 59

Multiple Choice

pettijohn Inc.
The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm hasno amortization charges, it does not lease any ass ets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
 Balance Shet (Millions of $ )  \text { Balance Shet (Millions of } \$ \text { ) }
 Assets 2016 Cash and securities $1,554.00 Accounts receivable 9,660.00 inventories 13,440.00 Total current assets $24,654.00 Net plant and equipment 17,346.00 Total assets $42,000.00 Liabilities and Equity  Accounts payable $7,980.00 Notes payable 5,880.00 Accruals 4,620.00 Total current liabilities $18,480.00 Cong-term bonds 10,920.00 Cotal liabilities $29,400.00 Common stock 3,360.00 Retained earnings 9,240.00 Total common equity $12,600.00 Total liabilities and equity $42,000.00\begin{array}{lr}\text { Assets } & \underline{2016} \\\text { Cash and securities } & \$ 1,554.00 \\\text { Accounts receivable } & 9,660.00 \\\text { inventories } & 13,440.00 \\\text { Total current assets } & \$ 24,654.00 \\\text { Net plant and equipment } & 17,346.00 \\\text { Total assets } & \$ 42,000.00 \\\text { Liabilities and Equity } \\\text { Accounts payable } & \$ 7,980.00 \\\text { Notes payable } & 5,880.0 0\\\text { Accruals } & 4,620.00\\\text { Total current liabilities } & \$ 18,480.00 \\\text { Cong-term bonds } & 10,920.00 \\\text { Cotal liabilities } & \$ 29,400.0 0\\\text { Common stock } & 3,360.00 \\\text { Retained earnings } & 9,240.00 \\\text { Total common equity } & \$ 12,600.00 \\\text { Total liabilities and equity } & \$ 42,000.00\end{array}
 Income Statement (Millions of $)  2016 Net sales $58,800.00 Operating costs except depr’n $55,274.00 Depreciation $1,029.00 Earnings bef int and taxes (EBIT)  $2,497.00 Less interest 1,050.00 Earnings before taxes (EBT)  $1,447.00 Taxes $314.00 Net income $1,133.00 Dther data:  Shares outstanding (millions)  175.00 Common dividends 509.83 Int rate on notes payable & L-T bonds 6.25% Federal plus state income tax rate 21.7% Year-end stock price $77.69\begin{array}{lr}\text { Income Statement (Millions of \$) } & 2016 \\\text { Net sales } & \$ 58,800.00 \\\text { Operating costs except depr'n } & \$ 55,274.00 \\\text { Depreciation } & \$ 1,029.00\\\text { Earnings bef int and taxes (EBIT) } & \$ 2,497.00 \\\text { Less interest } & 1,050.00 \\\text { Earnings before taxes (EBT) } & \$ 1,447.00 \\\text { Taxes } & \$ 314.00 \\\text { Net income } & \$ 1,133.00\\\text { Dther data: }\\\text { Shares outstanding (millions) } & 175.00 \\\text { Common dividends } & 509.83 \\\text { Int rate on notes payable \& L-T bonds } & 6.25 \% \\\text { Federal plus state income tax rate } & 21.7 \% \\\text { Year-end stock price } & \$ 77.69\end{array}
-Refer to the data for Pettijohn Inc.What is the firm's days sales outstanding? Assume a 360-day year for this calculation.


Definitions:

Material Breach

A significant violation of a contract that permits the other party to either compel performance, seek remedies for damages, or terminate the agreement.

Nonbreaching Party

The party in a contract who has not violated the agreement and may be entitled to legal remedies.

Obligations

Duties or actions that an individual or entity is legally required to perform according to the terms of a contract or law.

Mutual Rescission

An agreement between all parties to a contract to terminate their respective duties under the contract.

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