Calculations Shown In Excel file



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%.