Hard-Up Ltd Has a Current Ratio of 0

question 37

Multiple Choice

Hard-up Ltd has a current ratio of 0.75.Its current liabilities amount to $200 000.It borrows $75 000 from a finance company,repayable in five years.
-What is the immediate effect of the loan on current net profit?

• A) There is a decrease of $75 000.
• B) There is no immediate effect.
• C) It cannot be determined from the information provided.
• D) There is an increase of $75 000.

Recognize the importance of interaction with others as a primary factor in human behavior.

Differentiate between major sociological theories and their proponents.

Comprehend the role of symbolic interactionism in understanding social behaviors and meanings.

Explore the significance of ideologies in justifying and perpetuating systems of power.

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Definitions:

Direct Labor-Hours

The cumulative hours that employees actively participating in manufacturing processes have worked.

Predetermined Overhead

An estimated rate used in manufacturing to allocate overhead costs to products or services based on a certain activity measure.

Predetermined Overhead

An estimated overhead cost determined before the period begins for the purpose of allocating overhead costs to products or services in a more consistent manner.

Direct Materials

Raw materials that can be directly traced to and are integral to the finished product.