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Devlin Company
Devlin Company
Statement of Financial Position
as

question 59

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Devlin Company
Devlin Company
Statement of Financial Position
as of May 31
(in thousands)
 Assets year 7year 6 Current assets  Cash $45$38 Trading securities 3020 Accounts receivable (net)  6848 Inventories 9080 Prepaid expenses 2230 Total current assets $255$216 Investments, at equity 3830 Property, plant, and equipment (net)  375400 Intangible assets (net)  8045 Total assets $748$691 Liabilities and shareholders’ equity  Current liabilities  Notes payable $35$18 Accounts payable 7042 Accrued expenses 54 Income taxes pavable 1516 Total current liabilities 12580 Long-term debt 3535 Deferred taxes 32 Total liabilities $163$117 Shareholders’ equity  Preferred stock, 6%,$100 par value, cumulative 150150 Common stock, $10 par value 225195 Additional paid-in capital-common stock 114100 Retained earmings 96129 Total shareholders’ equity $585$574 Total liabilities and shareholders’ equity $748$691\begin{array}{lll}\text { Assets }&\text {year 7}&\text {year 6}\\\text { Current assets } & & \\\text { Cash } & \$ 45 & \$ 38 \\\text { Trading securities } & 30 & 20 \\\text { Accounts receivable (net) } & 68 & 48 \\\text { Inventories } & 90 & 80\\\text { Prepaid expenses }&22&30\\\text { Total current assets } & \$ 255 & \$ 216 \\\text { Investments, at equity } & 38 & 30 \\\text { Property, plant, and equipment (net) } & 375 & 400 \\\text { Intangible assets (net) } & 80 & 45\\\text { Total assets } &\$ 748 &\$ 691 \\\text { Liabilities and shareholders' equity } & & \\\text { Current liabilities } & \\\text { Notes payable } &\$ 35 & \$ 18 \\\text { Accounts payable } &70 & 42 \\\text { Accrued expenses } & 5 & 4 \\\text { Income taxes pavable } & 15 & 16\\\text { Total current liabilities } & 125 & 80 \\\text { Long-term debt } & 35 & 35 \\\text { Deferred taxes } & 3 & 2\\\text { Total liabilities } &\$ 163 &\$ 117 \\\text { Shareholders' equity } & \\\text { Preferred stock, } 6 \%, \$ 100 \text { par value, cumulative } & 150 & 150\\\text { Common stock, } \$ 10 \text { par value } & 225 & 195 \\\text { Additional paid-in capital-common stock } & 114 & 100 \\\text { Retained earmings } & 96 & 129 \\\text { Total shareholders' equity }&\$585&\$574\\\text { Total liabilities and shareholders' equity }&\$748&\$691\end{array}
Devlin Company
Income Statement
For the year ended May 31
(in thousands)
 Year 7 Year 6 Net sales $480$460 Costs and expenses  Cost of goods sold 330315 Selling, general, and administrative 5251 Interest expense 89 Income before taxes $90$85 Income taxes 3634 Net income $54$51\begin{array}{lll}&\text { Year } 7&\text { Year } 6\\\text { Net sales } & \$ 480 & \$ 460 \\\text { Costs and expenses } & & \\\text { Cost of goods sold } & 330 & 315 \\\text { Selling, general, and administrative } & 52 & 51\\\text { Interest expense }&8&9\\\text { Income before taxes } & \$ 90 & \$ 85 \\\text { Income taxes } & 36 & 34\\\text { Net income }&\$54&\$51\end{array} (CMA adapted, Jun 97 #17) Refer to the Devlin Company example.Devlin Company's rate of return on assets for the year ended May 31, Year 7, was


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