The Financial Statements of Snapit Company Are Given Below

question 34

Multiple Choice

The financial statements of Snapit Company are given below.
$\begin{array}{c}\text { Snapit Company } \\\text { Income Statement (2009) }\\\begin{array}{lrr} \hline \text { Sales } & \$ 4,000,000\\\text { Cost of goods sold } & \underline {3,040,000 } \\\text { Gross profit } & 960,000 \\\text { Selling \& administrative expenses } & \underline { 430,000 } \\\text { Operating profit } & 530,000 \\\text { Interest expense } & \underline {160,000 }\\\text { Income before tax } & 370,000 \\\text { Tax expense } & \underline {148,000} \\ \text { Net income } & \underline {\$ 222,000} \\\end{array} \end{array}$
$\begin{array}{c}\begin{array}{lll} \text { Balance Sheet } &2009\\\\ \text { Cash } &\$ 60,000 \\ \text { Accounts receivable } & 550,000 \\ \text { Inventory } & \underline {690,000} \\ \text {Total current assets } &\$ 1,300,000 \\ \text {Fixed assets } & \underline {1,300,000} \\ \text { Total assets } & \underline {\$ 2,600,000} \\\\ \text { Accounts Payable } &\$ 270,000 \\ \text { Bank loan } & \underline {580,000} \\ \text { Total current liabilities } & \$ 850,000 \\ \text {Bond payable } & \underline { 900,000} \\ \text { Total liabilities } & \underline {\$ 1,750,000 }\\ \text { Common stock ( 130,000 shares) } & \$ 250,000 \\ \text {Retained earnings } & \underline {600,000}\\ \text { Total liabilities \& equity } & \underline {\$ 2,600,000} \\\end{array}\begin{array}{lll}2008\\\\\$ 50,000 \\500,000 \\\underline {620,000} \\\$ 1,170,000 \\\underline {1,230,000} \\\underline {\$ 2,400,000} \\\\\$ 250,000 \\\underline {500,000} \\\$ 750,000 \\\underline {1,000,000} \\\underline {\$ 1,750,000 }\\\$ 250,000 \\\underline {400,000 }\\\underline {\$ 2,400,000} \\\end{array}\end{array}$
Note: The common shares are trading in the stock market for $100 each. Refer to the financial statements of Snapit Company. The firm's quick ratio for 2009 is

• A) 1.68.
• B) 1.12.
• C) 0.72.
• D)1.92.
• E) None of the options are correct.

Understand the components and calculations involved in a job-order costing system.

Calculate the predetermined overhead rate and apply manufacturing overhead to jobs.

Prepare journal entries for transactions relevant to job-order costing systems including raw materials, labor, and overhead.

Determine and analyze underapplied or overapplied manufacturing overhead and its financial implications.

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The procedure through which issues, concerns, or topics gain prominence or official consideration within public or organizational agendas.

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