Question

Complete the balance sheet and sales data (fill in the blanks), using the following financial data: Debt/net worth 60% Acid test ratio 1.2 Asset turnover 1.5 times Day sales outstanding in accounts receivable 40 days Gross profit margin 30% Inventory turnover 6 times Balance sheet Cash ________ Accounts payable ________ Accounts receivable ________ Common stock $15,000 Inventories ________ Retained earnings $22,000 Plant & equipment ________ Total assets ________ Total liabilities ________ & capital Sales ________ Cost of goods sold ________.

Answer 1

Approach to solve:-

Using Debt Turnover Ratio we will calculate Accounts Payables

Using Total Asset Turnover Ratio we will calculate Sales

Using days Sales outstanding in accounts receivable we will calculate Accounts receivable

Using Inventory Turnover Ratio we will calculate Inventory

Using Acid Test Ratio we will calculate Cash

Step 1 :- Total Calculating total Debt to Networth Debt using Debt to Netooth hatia. = 60% Total Debt Networth - 60% Total Debt = 60% ( Networth) Total Debt = 60% [common steckt Retained Earnings / 60% ( 15000 + 22000) - Total Debt = . Total Debt = $ 22200.

Accet hercover Calculating Sales using Asset twee Step 2:- 'Ratio Asset Turnover Ratio = Soles Total Assets 1.5 times = sales [Nehoorth + Total Debt 1.5 times - sales [lusooo +22000) + 22200] 1.5 times = sales 59200 Sales = 59200 X 1.5 Sales = $ 88800) Step 3 :- Calculating Accounts receivable wring days sales outstanding in Accounts receivable. In other words, Accounts receivable Ratio)

x 360 Accounts Receivables sales Days sales outstanding in Accounts Receivable. I Account Receivables x 360 = 40 - 888 - L A Clount Receivable z 40* 88800 360 Account Receivable = $ 9867, Note : - It is assumed that year = 360 dayse _ Step 4: -. Calculating inventory using inventory hulsover La cost of goods_sold - Sales - Gross Margia = 88800 - (30% of sgpoo). Ratio ds sold. = $62160 b) Inventory two over = Cost of Goods sold Closing Inventory 62 160 6 times = closing Inventory closing Investory = 62169 Clesing Inventory = $ 103.60

steps :- Ratio Calculating Cash balance wing Acid tech Asid Test Ratio & Account Receivablet Cash Account payable 1,2 = Cash 9867 + 22200 1.2 * 22200 = 9867 + Cash 26640 = 9867 + Cash Cash = 26640 - 9867 Cash = $16773.

Balance sheet Liablities Networth t. 22200 Commee stock 15.000 L Retained Earnings L 22000 Assets Plast and Equipments Balasieng figured 37000 Current Assets. Tash 16773 | Debtors (AIR) 9867 Inventory 10360 | 37000 Total Deble | Account Payable 22 200 Total Liabilities 59200 Total Assets 59200