Question

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data:

Total assets turnover: 1.9
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25%
Total liabilities-to-assets ratio: 40%
Quick ratio: 1.00
Days' sales outstanding (based on 365-day year): 36.5 days
Inventory turnover ratio: 3.50

Do not round intermediate calculations. Round your answers to the nearest whole dollar.

Partial Income Statement Information
Sales	$
Cost of goods sold

Balance Sheet
Assets				Liabilities and Equity
Cash	$			Accounts payable	$
Accounts receivable				Long-term debt		50,000
Inventories				Common stock
Fixed assets				Retained earnings		100,000
Total assets	$	400,000		Total liabilities and equity	$

Answer 1

Calculating the Balance Sheet and Income Statement information:-

- Total Asset Turnover = Net Sales/Total Assets

1.9 = Net Sales/$400,000

Net Sales = $760,000

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

0.25 = (680,000-COGS)/760,000

190,000 = 760,000-COGS

COGS = $ 570,000

- Total liabilities-to-assets ratio = Total liabilities/Total Assets

0.40 = Total liabilities/$400,000

Total liabilities = $160,000

- Total liabilities = Accounts Payable + Long-term debt

160,000 = Accounts Payable + 50,000

Accounts Payable = $110,000

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

36.5 = (Accounts Receivables/760,000)*365

Accounts Receivables = $ 76,000

- Inventory turnover ratio = COGS/Inventory

3.50 = 570,000/Inventory

Inventory = $162,857

- Quick ratio = (Cash +Accounts receivable)/Accounts Payable

1.00 = (Cash + 76,000)/110,000

Cash = $34,000

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

400,000 = 34,000 + 76,000 + 162,857 + Fixed Assets

Fixed assets = $127,143

- Total Assets = Total liabilities and Equity = $400,000

Total liabilities and Equity = Total Liabilities + Common stock + Retained Earnings

400,000 = 160,000 + Common stock + 100,000

Common stock = $140,000

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