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27) What is the current ratio of the Hippodrome Entertainment Company if the cur

ID: 2597514 • Letter: 2

Question

27) What is the current ratio of the Hippodrome Entertainment Company if the current assets are $1,200,000 and the current liabilities are $1,405,000. The current ratio expresscd as a proportion is b. 0.55:. c. 0.44:1 d. 0.85:1. 28) Product costs consist of a. direct materials and direct labor only b. direct materials, direct labor, and manufacturing overhead. c. selling and administrative expenses. d. period costs. 29) Young Chang Company reported the following year-end information: beginning work in process inventory, $180,000; cost of goods manufactured, $730,000; beginning finished goods inventory, $310,000; ending work in process inventory, $220,000; and ending finished goods inventory, $140,000. Young Chang Company's cost of goods sold for the year is a. $900,000. b. $910,000. c. $826,000. d. $502,000. 30) Which one of the following does not appear on the balance sheet of a manufacturing company? a. Finished goods inventory b. Work in process inventory c. Cost of goods manufactured d. Raw materials inventory

Explanation / Answer

Answer 27 is d.

Current Assets = $1,200,000
Current Liabilities = $1,405,000

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $1,200,000 / $1,405,000
Current Ratio = 0.85 : 1

Answer 28 is b.

Product costs consist of direct materials, direct labor and manufacturing overhead.
Period costs consists of selling and administrative expenses.

Answer 29 is a.

Cost of Goods Manufactured = $730,000
Beginning finished goods inventory = $310,000
Ending finished goods inventory = $140,000

Cost of Goods Sold = Cost of Goods Manufactured + Beginning finished goods inventory - Ending finished goods inventory
Cost of Goods Sold = $730,000 + $310,000 - $140,000
Cost of Goods Sold = $900,000

Answer 30 is c.

Finished goods, work in process and raw materials inventory appear on the balance sheet under the merchandise inventory.
Cost of goods manufactured appears in income statement

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