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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

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:

  1. Operating expenses include depreciation expense of $10,000
  2. Accounts Payable related to the purchase of inventory
  3. Equipment that cost $12,500 was sold at a loss of $2,500
  4. New equipment was purchased during the year for $8,500
  5. Dividends declared and paid in 20X5 totalled $3,000
  6. Common shares were sold for $12,000 cash
  7. 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 quick ratio at December 20X5 was:

Multiple Choice

  • Between 0.88 and 2.64

  • Equal or above 2.65

  • Between 0.22 and 0.87

  • Not enough data provided to calculate it

  • Equal or below 0.21

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