Question

4.13

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.2× Days sales outstanding: 73.0 daysa Inventory turnover ratio: 5× Fixed assets turnover: 2.5× Current ratio: 2.0× Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25% 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 42,000 Inventories    Common stock    Fixed assets    Retained earnings 63,000 Total assets $210,000 Total liabilities and equity $   Sales $   Cost of goods sold $

Answer 1

Total asset turnover = 1.2

Sales/Total Assets = 1.2

Sales = 1.2*210,000

= $252,000

Cost of goods sold = 252,000*75% = $189,000

Days Sales outstanding = 73

365*Accounts receivables/Credit Sales = 73

Accounts receivables = 73*252,000/365

= $50,400

Inventory Turnover ratio = Cost of goods sold/Inventory

Inventory = 189,000/5

= $37,800

Fixed assets = 252,000/2.5

= $100,800

Current liabilities = (Cash + Accounts receivables + inventory)/2

= $54,600

A balance sheet always tallies

Cash	21,000	Current liabilities	$  54,600
Accounts receivable	50,400	Long-term debt	42,000
Inventories	37,800	Common stock	50,400
Fixed assets	100,800	Retained earnings	63,000
Total assets	$210,000	Total liabilities and equity	$  210,000
Sales	$  252000	Cost of goods sold	$  189,000