Financial Statements for Orange Company Appear Below Total Dividends During Year 2 Were

question 100

Multiple Choice

Financial statements for Orange Company appear below:

$\begin{array}{|l|r|}\hline&\text { Orange Company } \\&\text { Income Statement } \\&\text { For the Year Ended December 31, Year } \\&2\\&\text { (dollars in thousands) }\\\hline \text { Sales (All on Account) } & \$ 2830 \\\hline \text { Costs of Goods Sold } & \$ 1980 \\\hline \text { Gross Margin } & \$ 850 \\\hline \text { Operating Expenses } & \$ 340 \\\hline \text { Net Operating Income } & \$ 510 \\\hline \text { Interest Expense } & \$ 30 \\\hline \text { Net Income before Taxes } & \$ 480 \\\hline \text { Income Taxes (30\%) } & \$ 144 \\\hline \text { Net Income } & \$ 336\\\hline\end{array}$


Total dividends during Year 2 were $\$ 156,000$ , of which $\$ 18,000$ were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $\$ 100$ .
-Orange Company's average sale period (turnover in days) for Year 2 was closest to which of the following?

• A) 20.6 days.
• B) 23.2 days.
• C) 29.5 days.
• D) 33.2 days.

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Definitions:

Product Departmentation

An organizational structure where departments are created based on the products or product lines they manage or produce.

Strengths

The inherent capabilities or positive qualities that an individual possesses, which are beneficial for performing certain tasks or solving problems.

Organizational Customers

Entities, such as businesses, governments, or non-profits, that purchase goods or services from another organization for internal use, resale, or to support their operations.

Functional Departmentation

The process of dividing an organization into departments or units based on the functions or roles they perform.