Question

Complete the balance sheet and sales information using the following financial data:

Total assets turnover: 1.4×
Days sales outstanding: 36.5 days^a
Inventory turnover ratio: 5×
Fixed assets turnover: 2.5×
Current ratio: 2.0×
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 35%
^aCalculation is based on a 365-day year.

Do not round intermediate calculations. Round your answers to the nearest dollar.

Balance Sheet
Cash	$		Current liabilities	$
Accounts receivable			Long-term debt	78,000
Inventories			Common stock
Fixed assets			Retained earnings	136,500
Total assets	$390,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

1 ] Asset turnover = Revenue/Total asset

1.4 = Revenue/$390,000

Revenue= $390,000*1.4

=$546,000

Thus, sales is $546,000

2] days sales outstanding = [Accounts receivable/Total credit sales] *days in accounting period

36.5 = [Accounts receivable/$546,000]*365

Accounts receivables= $54,600

3] Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 35%

0.35 =($546,000-Cost of good sold)/$546,000

$191,100=$546,000-Cost of goods sold

Cost of goods sold=$354,900

4] Inventory turnover ratio = sales/inventory

5 = $546,000/Inventory

Inventory = $546,000/5

Inventory = $109,200

5] fixed assets turnover = revenue/fixed assets

2.5=$546,000/Fixed assets

Fixed assets = $546,000/2.5

=$218,400

Balance Sheet
Cash**	$7,800[$390,000-$54,600-$109,200-$218,400]		Current liabilities***	$85,800
Accounts receivable	$54,600		Long-term debt	78,000
Inventories	$109,200		Common stock	$89,700[$390,000-85,800-78,000-136,500]
Fixed assets	$218,400		Retained earnings	136,500
Total assets	$390,000		Total liabilities and equity*	$390,000*
Sales	$546,000		Cost of goods sold	$354,900

*Total assets = Total liabilities+equity

**Total assets = cash+accounts receivables+inventories+fixed assets

$390,000= cash+$54,600+109,200+218,400

cash = $7,800

*** current ratio = current assets/current liabilities

current assets = cash+accounts receivables+inventory

=$7,800+54,600+$109,200

=$171,600

current ratio = current assets/current liabilities

2= $171,600/ current liabilities

Current liabilities= $85,800

****Total liabilities and equity= current liabilities+long term debt+common stock+retained earnings

$390,000=current liabilities+$78,000+$89,700+$136,500

Current liabilities= $85,800

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