Read the Information About Cargo Corporation

question 89

Essay

Read the information about Cargo Corporation.
Required:
Prepare the current liabilities section of the balance sheet for Cargo Corp.at December 31, 2015.You may omit the heading.If the amount of current liabilities were larger, what effect would this have on the current ratio?

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, calculated by dividing estimated overhead costs by an allocation base.

Machine-Hours

A measure of production time, representing the hours a machine is operated within a given period.

Direct Labor-Hours

A metric for quantifying the manual work done by employees on the production floor, correlating with the labor costs of manufacturing.

Plantwide Predetermined Rate

A single overhead rate calculated by dividing total estimated manufacturing overhead costs by the total estimated amount of allocation base, applied throughout the plant.