Question

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

Total assets turnover: 1.3x
Days sales outstanding: 37.5 days^a
Inventory turnover ratio: 7x
Fixed assets turnover: 2.5x
Current ratio: 2.5x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30%
^aCalculation is based on a 365-day year. Do not round intermediate calculations. Round your answers to the nearest cent.

Balance Sheet
Cash	$		Current liabilities	$
Accounts receivable			Long-term debt	40,000
Inventories			Common stock
Fixed assets			Retained earnings	70,000
Total assets	$200,000		Total liabilities and equity	$
Sales	$		Cost of goods sold

Answer 1

Calculating the Balance Sheet and Income Statement information:-

- Total Asset Turnover = Net Sales/Total Assets

1.3 = Net Sales/$200,000

Net Sales = $260,000

- Gross profit margin on sales= (Sales - Cost of goods sold)/Sales

0.30 = ($260,000-COGS)/$260,000

78,000 =260,000 - COGS

COGS = $182,000

- Days' sales outstanding = (Accounts Receivables/Net Sales)*365

37.5 = (Accounts Receivables/260,000)*365

Accounts Receivables = $26,712.33

- Inventory turnover ratio = COGS/Inventory

7 =182000/Inventory

Inventory = $26,000

- Fixed assets turnover = Net Sales/Fixed Assets

2.5 = $260,000/Fixed Assets

Fixed Assets = $104,000

- Total Assets = Fixed Assets + Cash +Accounts receivable+Inventory

$200,000 = $104,000 + Cash + $26712.33 + $26000

Cash = $43,287.67

- Current ratio = (Cash +Accounts receivable+Inventory)/Current Liabilties

2.5 = ($43,287.67 + $26712.33 + $26000)/Current Liabilties

Current Liabilties = $96,000/2.5

Current Liabilties = $38,400

- Total Assets = Total liabilities and Equity = $200,000

Total liabilities and Equity = Current Liabilities + Long-term Debt + Common stock + Retained Earnings

$200,000 = $38,400 + $40,000 + Common stock + $70,000

Common stock = $51,600

Completing the balance sheet and sales information using theabove data:-

Balance Sheet
Cash	$ 43,287.67	Current liabilities	$ 38,400
Accounts receivable	$ 26712.33	Long-term debt	$ 40,000
Inventories	$ 26,000	Common stock	$51,600
Fixed assets	$ 104,000	Retained earnings	70,000
Total assets	$200,000	Total liabilities and equity	$ 200,000
Sales	$ 260,000	Cost of goods sold	$ 182,000

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