question 116
Multiple Choice
Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
Assets Current assets Cash Trading securities Accounts receivable (net) Inventories Prepaid expenses Total current assets Investments, at equity Property, plant, and equipment (net) Intangible assets (net) Total assets Liabilities and shareholders’ equity Current liabilities Notes payable Accounts payable Accrued expenses Income taxes pavable Total current liabilities Long-term debt Deferred taxes Total liabilities Shareholders’ equity Preferred stock, 6%,$100 par value, cumulative Common stock, $10 par value Additional paid-in capital-common stock Retained earmings Total shareholders’ equity Total liabilities and shareholders’ equity year 7$4530689022$2553837580$748$3570515125353$16315022511496$585$748year 6$3820488030$2163040045$691$184241680352$117150195100129$574$691
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
Net sales Costs and expenses Cost of goods sold Selling, general, and administrative Interest expense Income before taxes Income taxes Net income Year 7$480330528$9036$54 Year 6$460315519$8534$51 (CMA adapted, Jun 97 #15) Refer to the Devlin Company example.Devlin Company's inventory turnover for the year ended May 31, Year 7, was
Definitions:
Firm's Level
Refers to the perspective or activities that are specific to a single business entity, as opposed to a sector or economy as a whole.
New Equipment
Assets purchased by firms for long-term use to aid in producing goods and services, often associated with capital investment.
Opportunity Cost
The act of losing potential rewards from other options upon the selection of a specific alternative.
Investment Line
A graphical representation showing the relationship between the level of investment and the rate of return or interest rate.