Answer:
Current Ratio: 2.49; 2.7; 1.75
Acid test ratio: 1.32; 0.64; 0.65
Explanation:
Current ratio
For Camaro:
= Current assets ÷ Current liabilities
= $ 5,915 ÷ $2,380
= 2.49
For GTO:
= Current assets ÷ Current liabilities
= $3,780 ÷ $1,400
= 2.7
For Torino:
= Current assets ÷ Current liabilities
= $6,900 ÷ $3,950
= 1.75
Acid test ratio:
For Camaro:
= (Current assets - Inventory - Prepaid expense) ÷ Current liabilities
= ($5,915 - $2,375 - $400) ÷ $2,380
= $3,140 ÷ $2,380
= 1.32
For GTO:
= (Current assets - Inventory - Prepaid expense) ÷ Current liabilities
= ($3,780 - $2,180 - $700) ÷ $1,400
= $900 ÷ $1,400
= 0.64
For Torino:
= (Current assets - Inventory - Prepaid expense) ÷ Current liabilities
= ($6,900 - 3,450 - $900) ÷ $3,950
= $2,550 ÷ $3,950
= 0.65
Answer:
Option (B) is correct.
Explanation:
Amount of which adjusting entry required:
= Amount of uncollectible accounts - Balance in Allowance for uncollectible accounts
= (Balance in accounts receivable × Estimated percentage of accounts receivable to be uncollectible) - Balance in Allowance for uncollectible accounts
= ($200,000 × 4%) - $2,000
= $8,000 - $2,000
= $6,000
Therefore, the adjusting entry is as follows:
Bad debt expense A/c Dr. $6,000
To Allowance for uncollectible accounts $6,000
(To record the bad debt expense)
Answer:
<em>Ending WIP = 29,700</em>
Explanation:
Beginning WIP 26,500
Direct Materials used 74,300
Direct Labor used 55,000
Factory Overhead 95,700
Cost added during the period 225,000
Cost of Goods manufactured 221,800
26,500 + 225,000 = Ending WIP + 221,800
26,500 + 225,000 - 221,800= Ending WIP
<em>Ending WIP = 29,700</em>
We need the materials used in production, <u>the purchases is not the value we need, it is irrelevant.</u>
If Martin and Beasley switched from its current accounting method to an activity-based costing system, the amount of administrative cost chargeable to consulting services would change by an amount other than those listed above
Option D
Solution:
Total amount of administrative cost chargeable to consulting services in ABC costing is given below
( $200000 x 35% ) + ( $50000 x 30% ) + ( $20000 x 20% )
= $70000 + $15000 + $4000
= $89000
Hence, Using ABC costing administrative cost chargeable to consulting services decreases by ($270000 - $89000)
decreases by $181000
Hence, D. change by an amount other than those listed above.
