# 2023 Assignment 08 A04 Intermediate Accounting I Part A 30 points The

Calculations Shown In Excel file 2023 Business Finance

2023 Assignment 08 A04 Intermediate Accounting I Part A 30 points The

Assignment 08           A04 Intermediate Accounting I

Part A (30 points)

The Bravo Company manufactures a single product.  On December 31, 2012 Bravo adopted the dollar-value LIFO inventory method.  The inventory on that date using the dollar-value LIFO inventory method was determined to be \$500,000.  Inventory data for succeeding years are as follows:

 Year Ended December 31 Inventory at Respective Year-end Prices Relevant Price Index (Base Year 2012) 2012 \$500,000 1.00 2013 527,000 1.08 2014 635,000 1.15 2015 645,000 1.21

Compute the inventory amount at December 31, 2013, 2014, and 2015 using the dollar-value LIFO inventory method for each year.  (Round all amounts to the nearest dollar, 10 points each)

Part B (40 points)

Information from Hope Company’s records for the year ended December 31, 2015 is available as follows:

 Net sales \$2,800,000 Cost of goods manufactured: Variable \$1,260,000 Fixed \$630,000 Operating expenses: Variable \$196,000 Fixed \$240,000 Units manufactured 70,000 Units sold 60,000 Finished goods inventory, 1/1/2015 \$0

Hope had no work-in-process inventories at either the beginning or end of 2015.

What would be Hope’s finished goods inventory cost under the variable (direct) costing method at December 31, 2015? (20 points)

What would Hope’s operating income be under the absorption costing method? (20 points)

Part C (30 points, 10 each)

Tool City, Inc. had 300 cordless screwdrivers on hand at January 1, 2015 costing \$45 each.  Purchases and sales of cordless screwdrivers during the month of January were as follows:

 Date Purchases Sales January 9 200 @ \$75 January 14 100 @ \$47 January 23 75 @ \$76 January 25 100 @ \$48 January 30 75 @ \$77

ToolCity does not maintain perpetual inventory records.  According to a physical count, 150 cordless screwdrivers were on hand at January 31, 2015.

What is the cost of the inventory at January 31, 2015 under the FIFO method?

What is the cost of the inventory at January 31, 2015 under the LIFO method?

What is the cost of the inventory at January 31, 2015 under the FIFO method if only 145 cordless screwdrivers were on hand at the time of the physical count?

Assignment 04 A04 Intermediate Accounting I

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 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:

ROA

ROCE

Operating profit margin

Asset turnover.

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

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