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: 3.0×
Current ratio: 2.5×
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20%
^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	54,000
Inventories			Common stock
Fixed assets			Retained earnings	126,000
Total assets	$360,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total asset turnover = Sales/total assets

1.4 = Sales/360000

Sales = 504000

days of sales outstanding = number of days in a year/receivables turnover

36.5 = 365/Receivables turnover

Receivables turnover = 10

Receivables turnover = Credit sales/receivables

10 = 504000/Receivables

Receivables = 50400

COGS = (1-gross profit)*sales = (1-0.2)*504000=403200

Inventory turnover = COGS/inventory

5 = 403200/Inventory

Inventory = 80640

Fixed asset turnover = Sales/fixed assets

3 = 504000/Fixed assets

Fixed assets = 168000

Cash = total assets-fixed assets-receivables-inventory =

360000-168000-80640-50400=60960

Current assets = cash +receivables+inventory = 60960+50400+80640=192000

Current ratio = current assets/current liablities

2.5 = 192000/Current liabilities

Current liabilities = 76800

Total share holder equity and liabilities = total assets = 360000

common stock= Total share holder equity and liabilities-Current liabilities-long term debt-retained earnings = 360000-76800-54000-126000=103200