Question
The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information: Total Inc. Income Statement Year Ended December 31,
The income statement for the year ended December 31, 20X6, for Total Inc. contains the following information:
Total Inc. | ||
Income Statement | ||
Year Ended December 31, 20X6 | ||
Sale | $ | 50,000 |
Cost of goods sold | $ | 30,000 |
Gross Profit | $ | 20,000 |
Operating Expenses | $ | 15,000 |
Profit from Operations | $ | 5,000 |
Income Tax Expense | $ | 3,000 |
Profit | $ | 2,000 |
Total Inc. comparative balance sheet at December 31
20X6 | 20X5 | |||||
Cash | $ | 1,200 | $ | 1,000 | ||
Accounts Receivable | $ | 300 | $ | 1,500 | ||
Inventory | $ | 5,000 | $ | 3,000 | ||
Equipment | $ | 12,000 | $ | 8,000 | ||
Accumulated Depreciation - equipment | $ | (4,000 | ) | $ | (2,000 | ) |
Total Assets | $ | 14,500 | $ | 11,500 | ||
Account Payable | $ | 1,000 | $ | 3,500 | ||
Long-term Notes Payable | $ | 2,000 | $ | - | ||
Common shares | $ | 10,000 | $ | 8,000 | ||
Retained Earnings | $ | 1,500 | $ | - | ||
Total Liabilities & Shareholders' Equity | $ | 14,500 | $ | 11,500 | ||
Additional Information:
Operating expenses include depreciation expense of $2,500
Accounts Payable related to the purchase of inventory
Equipment that cost $2,000 was sold for $1,500 cash
New equipment was purchased during the year for $5,000
Common shares were sold for $2,000 cash
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
Equal or below 0.21
Between 0.22 and 0.87
Not enough data provided to calculate it
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