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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	$	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 current ratio at December 20X5 was:

Multiple Choice

Between 4.81 and 9.61

Not enough data provided to calculate it

Between 9.62 and 19.24

Equal or below 4.80

Equal or above 19.25

Answer & Explanation Solved by verified expert

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