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Cash $   Current liabilities $   Accounts receivable $   Long-term debt $40,000 Inventories $   Common stock $  ...

Cash $   Current liabilities $  
Accounts receivable $   Long-term debt $40,000
Inventories $   Common stock $  
Fixed assets $   Retained earnings $60,000
Total assets $200,000 Total liabilities and equity $  
Sales $   Cost of goods sold

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

Total assets turnover: 1.1x
Days sales outstanding: 38 days
Inventory turnover ratio: 4x
Fixed assets turnover: 2.5x
Current ratio: 2.5x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 15%
Calculation is based on a 365-day year. Round your answer to the nearest cent.

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Expert Solution

Answer:

Total Assets Turnover = Sales / Total Assets
1.1 = Sales / 200,000
Sales = $220,000

Days Sales Outstanding = 365 * Accounts Receivable / Sales
38 = 365 * Accounts Receivable / 220,000
Accounts Receivable = $22,904

Gross Profit Margin on Sales = (Sales – Cost of Goods Sold) / Sales * 100
15 = (220,000 – Cost of Goods sold) / 220,000 * 100
33,000 = (220,000 – Cost of Goods sold)
Cost of Goods Sold = $187,000

Inventory Turnover Ratio = Cost of Goods Sold / Inventory
4 = 187,000 / Inventory
Inventory = $46,750

Fixed Assets Turnover = Sales / Fixed Assets
2.5 = 220,000/ Fixed Assets
Fixed Assets = $88,000

Total Assets = Cash + Accounts Receivable + Inventories + Fixed Assets
$200,000 = Cash + $22,904 + $46,750 + $88,000
Cash = $42,346

Current Assets = Cash + Accounts Receivable + Inventories
Current Assets = $42,346 + $22,904 + $46,750
Current Assets = $112,000

Current Ratio = Current Assets / Current Liabilities
2.5 = 112,000/ Current Liabilities
Current Liabilities = $44,800

Total Liabilities and Equity = Current Liabilities + Long Term Debt + Common Stock + Retained Earnings
Total Liabilities and Equity = Total Assets
Total Liabilities and Equity = $200,000

$200,000 = $44,800 + $40,000 + Common Stock + $60,000
Common Stock = $55,200

jeff jeffy answered 2 years ago
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