question 47
Multiple Choice
Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO reserve adjustment, which company would have the strongest liquidity position for 2017 as expressed by the current ratio?" (amounts in $ millions) Inventory Method for 2016 & 2017 2016 Ending inventory assuming LIFO 2016 Ending inventory assuming FIFO 2017 Ending inventory assuming LIFO 2017 Ending inventory assuming FIFO 2016 Current assets (reported on balance sheet) 2016 Current liabilities 2017 Current assets (reported on balance sheet) 2017 Current liabilities 2017 Cost of goods sold Boxter LIFO $324$427$436$578$1,677$987$2,225$1,306$4,678 Clifford FIFO N/A $535 N/A $612$2,031$1,209$2,605$1,410$1,410 Danforth LIFO $225$310$167$209$1,308$545$1,100$465$465 Evans FIFO N/A $663 N/A $542$2,748$1,200$2,390$1,000$1,000
Identify the sequence of financial statement preparation.
Calculate total assets, liabilities, and stockholders' equity from an adjusted trial balance.
Comprehend the structure and components of an income statement.
Recognize accounts that appear in the post-closing trial balance and those that do not.
Definitions:
Comparative Advantage
The ability of an individual or entity to produce goods or services at a lower opportunity cost than other individuals or entities.
Economic Investment
The expenditure on capital goods used to produce other goods or services in the future, contributing to a country's productive capacity.
Fermentation System
A biological process using microorganisms to convert organic materials into alcohol, gases, or acidic products.
Entrepreneur
An individual who creates a new business, bearing most of the risks and enjoying most of the rewards, often seen as an innovator and a source of new ideas, goods, services, and business/or procedures.