Norton Company Has the Following Assets on January 1, 2017

question 31

Multiple Choice

Norton Company has the following assets on January 1, 2017 and January 1, 2016.
$$\begin{array} { l r r r } & 1 / 1 / 17 & 1 / 1 / 16 \\\hline \text { Cash } & \$ 430,000 & \$ 370,000 \\\text { Accounts receivables } & ? & 333,000 \\\text { Marketable securities } & 186,000 & 130,000 \\\text { Irventory } & 220,000 & ? \\\text { Net plant and equipment } & 120,000 & 129,000\end{array}$$
If Norton's quick ratio is 2.50 for 2017 and its current liabilities are $500,000, what is the amount of its accounts receivables?

• A)$324,000
• B)$204,000
• C)$634,000
• D)There is not enough information to answer this question.

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Definitions:

Deferred in Inventories

A situation where costs incurred in acquiring or producing inventory are postponed from being recognized as expenses until the goods are sold.

Released from Inventories

The process of moving goods from inventory to be used in production or to be sold, thereby reducing the inventory account.

Unit Product Cost

The total cost (both direct and indirect) to produce a single unit of a product.

Absorption Costing

A costing method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.