Use the Following Information for Questions

question 47

Multiple Choice

Use the following information for questions
The following trial balance of Terracota Corp.at December 31, 2010 has been properly adjusted except for the income tax expense adjustment.

Other financial data for the year ended December 31, 2010:
 Included in accounts receivable is $720,000 due from a customer and payable in quarterly instalments of $90,000.The last payment is due December 29, 2012.
 The balance in the Future Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $30,000 is classified as a current liability.
 During the year, estimated tax payments of $465,000 were charged to income tax expense.
The current and future tax rate on all types of income is 35 percent.In Terracota's December 31, 2010 balance sheet,
-The current assets total is

• A)$5,955,000.
• B)$5,595,000.
• C)$3,060,000.
• D)$4,495,000.

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Definitions:

Factory Overhead

Costs associated with the manufacturing process that are not directly tied to the product being manufactured, such as utilities, maintenance, and managerial salaries.

Direct Labor Costs

Expenses associated with employees who directly contribute to the production of goods or services, such as wages and salaries for manufacturing workers.

Sustainable Business Activity

An approach to conducting business that prioritizes environmental conservation, social responsibility, and economic performance.

Crop Rotation

An agricultural technique where different types of crops are planted in the same area in sequenced seasons to improve soil health and reduce pest and disease risk.