A04 Assignment 04

A04 Assignment 04
A04 Intermediate Accounting I  
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Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Refer to the "Assignment Format" page for specific format requirements.
Part A (40 points)
Vince Corporation has current assets of $300,000 and current liabilities of $175,000.
Compute the effect of each of the following transactions on Vince’s current ratio:
Refinanced a $50,000 long-term mortgage with a short-term note.
Purchasing $80,000 of merchandise inventory with short-term accounts payable.
Paying $30,000 of short-term accounts payable.
Collecting $40,000 of short-term accounts receivable.
Part B (20 points)
Selected data of the Peninsula Company follow:
As of December 31
Balance Sheet Data
2014
2013
Accounts receivable
$671,000
$642,000
Allowance for doubtful accounts
31,000
22,000
Net accounts receivable
$640,000
$620,000
Inventories—lower of cost or market
$542,500
$642,500
Year Ended December 31
Income Statement Data
2014
2013
Net credit sales
$3,150,000
$3,000,000
Net cash sales
800,000
600,000
Net sales
$3,950,000
$3,600,000
Cost of goods sold
$2,370,000
$2,160,000
Selling, general, and administrative expenses
475,000
350,000
Other
150,000
125,000
Total operating expenses
$2,995,000
$2,635,000
Net income
$955,000
$965,000
What is the accounts receivable turnover for 2014?
What is the inventory turnover for 2014?
Part C (40 points)
Selected information taken from the 2014 annual report of Aardvark Company follows. During 2014, the company had no nonoperating or nonrecurring items included in income and had no outstanding preferred stock.
($ in millions)
2014
2013
Sales
$19,903
$18,781
Interest expense...