The Crafter Company had the following assets and liabilities as of December 31, 2012:

ASSETS
Cash	$28,000
Accounts receivable	15,000
Inventory	20,000
Equipment	50,000
LIABILITIES
Current portion of long-term debt	10,000
Accounts payable	2,000
Long-term debt	25,000

Determine the quick ratio for the end of the year (rounded to one decimal point).

Answer

		a5.3
	b	3.6
	c	3.3
	d	2.3

Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Answer

	a	6.25%
	b	10.00%
	c	10.26%
	d	9.75%

Which of the following statements concerning taxation is accurate?

Answer

a

Corporations pay federal income taxes but not state income taxes.

b

Corporations pay federal and state income taxes.

c

Only the owners must pay taxes on corporate income.

d

Corporations pay income taxes but their owners do not.

The following totals for the month of April were taken from the payroll register of Magnum Company.

Salaries	$12,000
FICA taxes withheld	550
Income taxes withheld	2,500
Medical insurance deductions	450
Federal Unemployment Taxes	32
State Unemployment Taxes	216

The journal entry to record the monthly payroll on April 30 would include a

Answer

a

credit to Salaries Payable for $8,500

b

debit to Salaries Expense for $8,252

c

debit to Salaries Payable for $8,500

d

debit to Salaries Payable for $8,252