Seaforce Manufacturing Inc.
Income Statement
Year Ended December 31, 20X5
Sale				$	340,000
Cost of goods sold				$	250,100
Gross Profit				$	89,900
Operating Expenses	$	55,000
Loss on Sale of equipment	$	2,500		$	57,500
Profit from Operations				$	32,400
Other expenses
Interest Expense				$	3,500
Profit before Income Tax				$	28,900
Income Tax Expense				$	12,000
Profit				$	16,900

Additional Information:

Operating expenses include depreciation expense of $10,000

Accounts Payable related to the purchase of inventory

Equipment that cost $12,500 was sold at a loss of $2,500

New equipment was purchased during the year for $8,500

Dividends declared and paid in 20X5 totalled $3,000

Common shares were sold for $12,000 cash

Interest payable in 20X5 was $800 greater than interest payable in 20X4

Seaforce Manufacturing Inc. comparative balance sheet at December 31 20X5

	20X5			20X4
Cash	$	6,450		$	4,100
Accounts Receivable	$	72,000		$	6,500
Inventory	$	110,250		$	140,000
Prepaid Expenses	$	1,750		$	1,020
Equipment	$	96,000		$	100,000
Accumulated Depreciation - equipment	$	(50,000	)	$	(42,000	)
Total Assets	$	236,450		$	209,620
Account Payable	$	16,230		$	9,900
Interest Payable	$	810		$	10
Income taxes payable	$	10,800		$	9,500
Dividends Payable	$	1,800		$	2,800
Long-term Notes Payable	$	55,000		$	62,000
Common shares	$	135,000		$	123,000
Retained Earnings	$	16,310		$	2,410
Total Liabilities & Shareholders' Equity	$	236,450		$	209,620

Round answers to fit 2 decimal places in all questions (in % questions a 0.12 is presented as 12%, so a 0.124 is rounded as 12% and 0.127 is rounded as 13%)

The accounts receivable turnover at December 20X5 was:

Equal or below 1.17

Not enough data provided to calculate it

Equal or above 4.73

Between 1.18 and 2.35

Between 2.36 and 4.72

If you had limited time and resources that prevented you from designing a complete system of internal control for your organization, you would focus your scarce resources on setting up controls over:

Revenue transactions

Inventory

Cash

Capital assets

Expense transactions

Stardust Furniture Store sells "low end" furniture and uses the installment method for revenue recognition. Its year-end is December 31. It shows the following data for January: Sales of $6,840 with a 50% markup. Sales terms: No down payment in January, no interest and 6 easy monthly payments starting in February. Required 1: Assuming no other transaction happened, what revenue is recognized in January? \$ Required 2: Assuming no other transaction happened, what revenue is recognized in February? $ Required 3: Assuming no other transaction happened, what cost of goods sold is recognized in March? \$ Required 4: Assuming no other transaction happened, what is the Gross Margin of April? \$