King Products Corporation King Products Corporation
Statement of Financial Position

question 107

Multiple Choice

King Products Corporation King Products Corporation
Statement of Financial Position
(in thousands)
$\begin{array}{lll}&\text { June } 30\\&\text { Year } 6&\text { Year } 5\\\text { Cash } & \$ 60 & \$ 50 \\\text { Marketable securities (at market) } & 40 & 30 \\\text { Accounts receivable (net) } & 90 & 60 \\\text { Inventories (at lower of cost or market) } & 120 & 100 \\\text { Prepaid items } & {30} & 40\\\text { Total current assets }&\$340&\$280\\\text { Long-term investments (at cost) } & 50 & 40 \\\text { Land (at cost) } & 150 & 150 \\\text { Building (net) } & 160 & 180 \\\text { Equipment (net) } & 190 & 200 \\\text { Patents (net) } & 70 & 34\\ \text {Gondwill (net) }&40&26\\\text { Total long-term assets }&\$660&\$630\\\text { Total assets }&\$1,000&\$910\\\text { Notes payable } & \$ 46 & \$ 24 \\\text { Accounts payable } & 94 & 56 \\\text { Accrued interest } & 30 & 30\\(\text { Total current liabilities }&\$170&\$110\\ \text {Notes payable, \( 10 \% \) due \( 12 / 31 / \) Year 12 }&20 & 20 \\ \text {Bonds payable, \( 12 \% \) due \( 6 / 30 / \) Year 15 }&30 & 30 \\ \text {Total long-term debt }&\$50&\$50\\ \text {Total liabilities }&\$220&\$160\\ \text { \text { Preferred stock- } 5 \% \text { cumulative, } \$ 100 \text { par, non-participating, authorized, issued }}&200&200\\ \text {and outstanding, 2,000 shares }\\\text { Common stock- } \$ 10 \text { par, } 40,000 \text { shares authorized, } 30,000 \text { shares issued and }&300&300\\\text { outstanding }\\\text { Additional paid-in capital--common } & 150 & 150 \\\text { Retained earnings } & 130 & 100\\\text { Total shareholders' equity }&\$780&\$750\\\text { Total liabilities and shareholders' equity }&\$1,000&\$910\end{array}$
King Products Corporation
Income Statement
For the year ended June 30
(in thousands)
$\begin{array}{lc}&\text { Year } 6\\\text { Net sales } & \$ 600 \\\text { Costs and expenses } & \\\text { Cost of goods sold } & 440 \\\text { Selling, general, and administrative } & 60 \\\text { Interest expense } & 10\\\text { Income before taxes } & \$ 90 \\\text { Income taxes } & 45\\\text { Net income }&\$45\end{array}$ (CMA adapted, Dec 96 #15) Refer to the King Products Corporation example.King Products Corporation's inventory turnover for the fiscal year ended at June 30, Year 6, was

• A)3.7
• B)4.0
• C)4.4
• D)5.0
• E)none of the above

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Definitions:

Surviving

Surviving refers to the act or process of continuing to live or exist, especially in spite of challenging circumstances or threats to existence.

R-Selected Species

Species characterized by high reproductive rates, short lifespans, and a focus on quantity of offspring rather than quality.

Lifespan

The maximum duration of life for an individual of a species.

Scramble Competition

A form of competition where resources are shared equally among competitors, leading to reduced growth and reproduction for all.