The Following Data (In Thousands of Dollars) Have Been Taken

question 11

Multiple Choice

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the year just ended.
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 990 \\\hline \text { Raw materials inventory, beginning } & \$ 40 \\\hline \text { Raw materials inventory, ending } & \$ 70 \\\hline \text { Purchases of raw materials } & \$ 120 \\\hline \text { Direct labour } & \$ 200 \\\hline \text { Manufacturing overhead } & \$ 230 \\\hline \text { Administrative expenses } & \$ 150 \\\hline \text { Selling expenses } & \$ 140 \\\hline \text { Work-in-process inventory, beginning } & \$ 70 \\\hline \text { Work-in-process inventory, ending } & \$ 50 \\\hline \text { Finished goods inventory, beginning } & \$ 120 \\\hline \text { Finished goods inventory, ending } & \$ 160 \\\hline\end{array}$

-What was the net income (in thousands of dollars) for the year?

• A) $150.
• B) $200.
• C) $490.
• D) $250.

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Definitions:

GAAP

The set of accounting principles, standards, and procedures that companies use to compile their financial statements. GAAP is used to ensure consistency and comparability across organizations.

Debt-For-Debt

A restructuring process where a company replaces or swaps one form of debt with another, like changing the terms or the type of loan.

Debt-For-Equity Swaps

A financial restructuring tool where a portion of debt is exchanged for a pre-determined amount of equity or stock.

Fair Value

An estimation of the market value of an asset or liability based on the assumptions market participants would use when pricing the asset or liability.