Question

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

Total assets turnover: 1.1×
Days sales outstanding: 73.0 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 = 15%
^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	67,500
Inventories			Common stock
Fixed assets			Retained earnings	94,500
Total assets	$270,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Cash	61110	Current Liablities	68400
Accounts receivable	59400	Long-term debt	67,500
Inventories	50490	Common stock	66600
Fixed assets	99000	Retained earnings	94,500
Total assets	$270,000	Total liabilities and equity	270,000

Sales

297000

Cost of Goods Sold

252450

Calculation :

1. Total liabilities and equity = Total assets

So, Total liabilities and equity = 270,000

2. Sales = Total asset tunover * Total Asset

Sales = 1.1 * 270000 ==> 297000

3. Accounts receivable = Days sales outstanding * Sales / 365

Accounts receivable = 73 * 297000 / 365 ==> 59400

4. Cost of Goods Sold :

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

15% = (297000 - COGS) / 297000

Cost of Goods Sold = 252450

5. Inventory = Cost of goods sold / Inventory turnover ratio

Inventory = 252450 / 5 ==> 50490

6. Fixed Asset = Sales / Fixed assets turnover

Fixed Asset = 297000 / 3 ==> 99000

7. Cash = Total Asset - Fixed Asset - Inventory - Accounts receivable

Cash = 270000 - 99000 -50490 - 59400 ==> 61110

8.Current Liablities = Current Asset / Current Ratio

Current Liablities = (61110 + 50490 + 59400) / 2.5

Current Liablities = 68400

9. Common Stock = Total liabilities and equity - Current liabilities - Long-term debt - Retained earnings

Common Stock = 270000 - 68400 - 67500 - 94500 ==> 66600