acc305_wk_2_integrating_case_5

Apr 17th, 2015
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Hi there.This document contains A+ work for the course ACC 305.I am sure that this work will not disappoint you.This document will give you the correct answers to the respective questions about the particular course.

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Integrating Case 5-23 on page 296You 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 Aci

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