Reference no: EM131590268

Intermediate Accounting Assignment

Part A - 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:

1. Refinanced a $50,000 long-term mortgage with a short-term note.
2. Purchasing $80,000 of merchandise inventory with short-term accounts payable.
3. Paying $30,000 of  short-term accounts payable.
4. Collecting $40,000 of short-term accounts receivable.

Part B - 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

1. What is the accounts receivable turnover for 2014?
2. What is the inventory turnover for 2014?

Part C - 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	130	169
Net income	1,153	1,088
Total assets	12,673	12,461
Dividends	(153)	(131)
Total stockholders' equity	$4,288	$4,007
Assumed tax rate	35%	35%
Industry ROA	7.32%
Industry operating profit margin	6.1%

For 2014, calculate:

a. ROA

b. ROCE

c. Operating profit margin

d. Asset turnover. 

Round your percentage answers to one decimal place.  For example, .1234 = 12.3%.