Question

4.13

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

Total assets turnover: 1.3×
Days sales outstanding: 36.5 days^a
Inventory turnover ratio: 4×
Fixed assets turnover: 3.0×
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	40,500
Inventories			Common stock
Fixed assets			Retained earnings	94,500
Total assets	$270,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total Assets Turnover = Sales / Total Assets
1.3 = Sales / $270,000
Sales = $351,000

Days Sales Outstanding = 365 * Accounts Receivable / Sales
36.50 = 365 * Accounts Receivable / $351,000
Accounts Receivable = $35,100

Gross Profit Margin = (Sales - Cost of Goods Sold) / Sales
0.35 = ($351,000 - Cost of Goods Sold) / $351,000
Cost of Goods Sold = $228,150

Inventory Turnover Ratio = Cost of Goods Sold / Inventories
4 = $228,150 / Inventories
Inventories = $30,713

Fixed Assets Turnover = Sales / Fixed Assets
3 = $351,000 / Fixed Assets
Fixed Assets = $117,000

Total Assets = Cash + Accounts Receivable + Inventories + Fixed Assets
$270,000 = Cash + $35,100 + $30,713 + $117,000
Cash = $87,187

Current Assets = Total Assets - Fixed Assets
Current Assets = $270,000 - $117,000
Current Assets = $153,000

Current Ratio = Current Assets / Current Liabilities
2.00 = $153,000 / Current Liabilities
Current Liabilities = $76,500

Total Liabilities and Equity = Total Assets
Total Liabilities and Equity = $270,000

Total Liabilities and Equity = Current Liabilities + Long-term Debt + Common Stock + Retained Earnings
$270,000 = $76,500 + $40,500 + Common Stock + $94,500
Common Stock = $58,500