# ACC 305 Week 2 Assignment Integrating Case 5-23

ACC 305 Week 2 Assignment Integrating Case 5-23

You are a new staff accountant with a large regional CPA firm, participating in your first audit. You recall from your auditing class that CPAs often use ratios to test the reasonableness of accounting numbers provided by the client. Since ratios reflect the relationships among various account balances, if it is assumed that prior relation- ships still hold, prior years’ ratios can be used to estimate what current balances should approximate. However, you never actually performed this kind of analysis until now. The CPA in charge of the audit of Covington Pike Corporation brings you the list of ratios shown below and tells you these reflect the relationships maintained by Covington Pike in recent years. Profit margin on sales = 5% Return on assets = 7.5% Gross profit margin = 40% Inventory turnover ratio = 6 times Receivables turnover ratio = 25 Acid-test ratio = .9 Current ratio = 2 to 1 Return on shareholders’ equity = 10% Debt to equity ratio = 1/3 Times interest earned ratio = 12 times

Jotted in the margins are the following notes: ● Net income \$15,000 ● Only one short-term note (\$5,000); all other current liabilities are trade accounts ● Property, plant, and equipment are the only noncurrent assets ● Bonds payable are the only noncurrent liabilities ● The effective interest rate on short-term notes and bonds is 8% ● No investment securities ● Cash balance totals \$15,000

Required: You are requested to approximate the current year’s balances in the form of a balance sheet and income statement, to the extent the information allows. Accompany those financial statements with the calculations you use to estimate each amount reported.

“WE’VE HAD A GOOD SUCCESS RATE ON THIS ASSIGNMENT. PLACE THIS ORDER OR A SIMILAR ORDER WITH HOMEWORK AIDER AND GET AN AMAZING DISCOUNT”
The post ACC 305 Week 2 Assignment Integrating Case 5-23 appeared first on Homeworkaider.

#### What Students Are Saying About Us

.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐
"Honestly, I was afraid to send my paper to you, but you proved you are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"

.......... Customer ID: 11***| Rating: ⭐⭐⭐⭐⭐
"This company is the best there is. They saved me so many times, I cannot even keep count. Now I recommend it to all my friends, and none of them have complained about it. The writers here are excellent."