A04 Intermediate Accounting I Assignment 4 (Ashworth College)
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:
a. Refinanced a $50,000 long-term mortgage with a short-term note.
b. Purchasing $80,000 of merchandise inventory with short-term accounts payable.
c. Paying $30,000 of short-term accounts payable.
d. Collecting $40,000 of short-term accounts receivable.
Part B (20 points)
Selected data of the Peninsula Company follow:
As of December 31
a. What is the accounts receivable turnover for 2014?
b. 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.