Compute the day sales in receivables and operating cycle

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Reference no: EM131800110

Question - A Partial balance sheet and income statement for King Corporation follow:

King Corporation Partial Balance Sheet 31-Dec-07

Assets


Current Assets


Cash

$33,493

Marketable securities

215,147

Trade receivables, less allowance of $6,000

255,000

Inventories, LIFO

523,000

Prepaid Expenses

26,180



Total Current Assets

$1,052,820



Liabilities


Current liabilities:


Trade Accounts payable

$103,689

Notes payable(primarily to banks) and commercial paper

210,381

Accured expenses and other liabilities

120,602

Income taxes payable

3,120

Current maturities of long-term debt

22,050



Total current liabilities

$459,842



King Corporation Partical Income Statement For Year Ended December 31, 2007

Net Sales

$3,050,600

Miscellaneous income

45,060


$3,095,660





Cost and expenses:


Cost of Sales

$2,185,100

Selling, general, and administrative expenses

350,265

Interest expense

45,600

Income Taxes

300,000


$2,880,965



Net Income

$214,695



Compute the following:

a. Working capital

b. Current ratio

c. Acid-test ratio

d. Cash ratio

e. Days' sales in receivables

f. Accounts receivable turnover in days

g. Days' sales in inventory

h. Inventory turnover in days

i. Operating cycle

Reference no: EM131800110

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