The Core Company Had the Following Assets and Liabilities as of December

question 43

Essay

The Core Company had the following assets and liabilities as of December 31:
​ $\begin{array}{|c|c|}\hline{\text { ASSETS }} & \\\hline \text { Cash } & \$ 58,000 \\\hline \text { Accounts receivable } & 25,000 \\\hline \text { Inventory } & 20,000 \\\hline \text { Equipment } & 50,000 \\\hline\\\hline {\text { LIABILITIES }} & \\\hline \text { Current portion of long-term debt } &20,000 \\\hline \text { Accounts payable } &12,000 \\\hline \text { Long-term debt } & 25,000 \\\hline\end{array}$ ​
Calculate the current ratio, working capital, and quick ratio. Round ratios to one decimal place.

Understand the significance and calculation of the predetermined overhead rate.

Recognize the types of costs included in the job cost sheet and their importance in job order costing.

Distinguish between direct and period costs and their treatment in cost accounting.

Analyze the impact of over or underapplied overhead on cost of goods sold and financial statements.

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Definitions:

Unforeseen Circumstances

Events or conditions that could not have been reasonably anticipated and that may affect the performance of contractual obligations.

Ethical

Pertaining to or dealing with morals, the principles of morality concerning right and wrong or good and bad behavior.

Illusory Promise

A statement that appears to be a promise but is too vague or lacks commitment to be legally binding and enforceable as a contract.

Promissory Estoppel

A legal principle preventing a party from withdrawing a promise if the other party has reasonably relied on that promise to their detriment.