King Products Corporation Statement of Financial Position (in thousands) Cash Marketable securities (at market) Accounts receivable (net) Inventories (at lower of cost or market) Prepaid items Total current assets Long-term investments (at cost) Land (at cost) Building (net) Equipment (net) Patents (net) Gondwill (net) Total long-term assets Total assets Notes payable Accounts payable Accrued interest ( Total current liabilities Notes payable, 10% due 12/31/ Year 12 Bonds payable, 12% due 6/30/ Year 15 Total long-term debt Total liabilities Preferred stock- 5 % cumulative, $ 100 par, non-participating, authorized, issued and outstanding, 2,000 shares Common stock- $10 par, 40,000 shares authorized, 30,000 shares issued and outstanding Additional paid-in capital–common Retained earnings Total shareholders’ equity Total liabilities and shareholders’ equity June 30 Year 6$60409012030$340501501601907040$660$1,000$469430$1702030$50$220200300150130$780$1,000 Year 5$50306010040$280401501802003426$630$910$245630$1102030$50$160200300150100$750$910 King Products Corporation Income Statement For the year ended June 30 (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 6$6004406010$9045$45 (CMA adapted, Dec 96 #18) Refer to the King Products Corporation example.King Products Corporation's quick (acid test) ratio at June 30, Year 6, was
A) 0.6 B) 1.1 C) 1.8 D) 2.0 E) none of the above
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