Reference: 13-13
Marcial Company
Balance Sheet
December 31, 20X6 and 20X5

Multiple Choice

Reference: 13-13
Marcial Company
Balance Sheet
December 31, 20X6 and 20X5 (dollars in thousands) $\begin{array}{|l|l|l|}\hline & 20 X 6 & 20 X 5 \\\hline \text { Current assets: } & & \\\hline \text { Cash and marketable securities } & \$ 140 & \$ 140 \\\hline \text { Accounts receivable, net } & 110 & 110 \\\hline \text { Inventory } & 140 & 130 \\\hline \text { Prepaid expenses } & {50} & {50} \\\hline \text { Total current assets } & 440 & 430 \\\hline \text { Noncurrent assets: } & & \\\hline \text { Plant \& equipment, net } & 1,550 & 1,480 \\\hline \text { Total assets } & \$ 1,990 & \$ 1,910 \\\hline\\\hline \text { Current liabilities: } & & \\\hline \text { Accounts payable } & \$ 120 & \$ 170 \\\hline \text { Accrued liabilities } & 10 & 40 \\\hline \text { Notes payable, short term } & 110 & 100 \\\hline \text { Total current liabilities } & 240 & 310 \\\hline \text { Noncurrent liabilities: } & & \\\hline \text { Bonds payable } & 390 & 400 \\\hline \text { Total liabilities } & 630 & 710 \\\hline \text { Shareholders' equity: } & & \\\hline \text { Preferred shares, \$10 par, 8\% } & 120 & 120 \\\hline \text { Common shares, \$5 par } & 200 & 200 \\\hline \text { Additional paid-in capital--common shares } & 250 & 250 \\\hline \text { Retained earnings } & 790 & 630 \\\hline \text { Total shareholders' equity } & \underline{1.360} & \underline{1.200} \\\hline\end{array}$ $$2$$ $$\begin{array} { | c | c | c | } \hline \text { Total shareholders' equity } & { 1,360 }& { 1,200 } \\\hline \text { Total liabilities \& shareholders' equity } & \underline { \$ 1,990 } & \underline { \$ 1,910 } \\\hline\end{array}$$ Marcial Company
Income Statement
For the Year Ended December 31, 20X6 (dollars in thousands) $$\begin{array} { | l | c | } \hline \text { Sales (all on account) } & \$ 1,630 \\\hline \text { Cost of goods sold } & 1,140 \\\hline \text { Gross margin } & 490 \\\hline \text { Operating expenses } & 190 \\\hline \text { Net operating income } & 300 \\\hline \text { Interest expense } & 40 \\\hline \text { Net income before taxes } & 260 \\\hline \text { Income taxes (30\%) } & 78 \\\hline \text { Net income } & \$ 182 \\\hline\end{array}$$
-Marcial Company's average sale period (turnover in days) for 20X6 was closest to:

A) 35.2 days.
B) 43.2 days.
C) 30.2 days.
D) 24.6 days.