Question

Complete the following balance sheet for the Basic Company using the following information:

Debt to Assets = 60%
Quick Ratio = 1.1
Asset Turnover = 5x
Capital Asset Turnover = 12.037x
Current Ratio = 2
Average Collection Period = 17.0708 days

**Assume all sales are on credit.

HINT: Enter numbers to the whole dollar, no commas needed. If you are stuck look at what inputs for each ratio - compare you need and what you have. You might need to use ratios beyond what is listed above to get the extra figures you need. You CAN do this. Plan the order of what you are calculating.

Cash	Answer	Current liabilities	Answer
Receivables	Answer	Bonds payable	Answer
Inventory	Answer	Total liabilities	Answer
Total current assets	Answer	Equity	Answer
Plant and Equipment	Answer	Total liabilities and equity	Answer
Total Assets	$325,000

Answer 1

Debt to Assets = Total Liabilities / Total Assets
0.60 = Total Liabilities / $325,000
Total Liabilities = $195,000

Asset Turnover = Sales / Total Assets
5 = Sales / $325,000
Sales = $1,625,000

Average Collection Period = 365 * Receivables / Sales
17.0708 = 365 * Receivables / $1,625,000
Receivables = $76,000

Capital Asset Turnover = Sales / Plant and Equipment
12.037 = $1,625,000 / Plant and Equipment
Plant and Equipment = $135,000

Total Assets = Total Current Assets + Plant and Equipment
$325,000 = Total Current Assets + $135,000
Total Current Assets = $190,000

Current Ratio = Total Current Assets / Current Liabilities
2.00 = $190,000 / Current Liabilities
Current Liabilities = $95,000

Quick Ratio = (Cash + Receivables) / Current Liabilities
1.10 = (Cash + $76,000) / $95,000
$104,500 = Cash + $76,000
Cash = $28,500

Total Current Assets = Cash + Receivables + Inventory
$190,000 = $28,500 + $76,000 + Inventory
Inventory = $85,500

Total Liabilities = Current Liabilities + Bonds Payable
$195,000 = $95,000 + Bonds Payable
Bonds Payable = $100,000

Total Liabilities and Equity = Total Assets
Total Liabilities and Equity = $325,000

Total Liabilities and Equity = Total Liabilities + Equity
$325,000 = $195,000 + Equity
Equity = $130,000