Question

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

Total assets turnover: 1.3×
Days sales outstanding: 36.5 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 = 35%
^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	66,000
Inventories			Common stock
Fixed assets			Retained earnings	115,500
Total assets	$330,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total assets Turnover ratio       =       Turnover/Total assets
   1.3   =       Sales/330,000
   Sales   =       4,29,000
              
Gross profit margin        =       (429,000-COGS)/429,000
   0.35   =       (429,000-COGS)/429,000
   COGS   =       2,78,850
              
Inventory Turnover ratio       =       COGS/Inventory
   5   =       278,850/Inventory
   Inventory   =       55,770
              
Day sales outstanding       =       Accounts receivable/sales*365
   36.5   =       (Accounts receivable/429,000)*365
Accounts receivable       =       42,900
              
Fixed assets turnover ratio       =       Sales/Fixed assets
   3   =       429,000/Fixed assets
   Fixed assets   =       1,43,000
              
Cash balance       =       Total assets-Fixed assets-Accounts receivable-Inventory
=       330,000-143,000-42,900-55,770
Cash balance       =       88,330
              
Current ratio       =       Current assets/Current liabilities
   2.5 =       (55,770+42,900+88,330)/Current liabilities
Current liabilities       =       187,000/2.5
Current liabilities       =       74,800
              
Total assets       =       Total liabilities and equity
              
Common stock       =       Total liabilities and equity-Current liabilities-Long term debt-retained earnings
=       330,000-74,800-66,000-115,500
Common stock       =       73700
              
Balance Sheet              
              
Cash $88,330
Accounts receivable               $42,900
Inventory    $55,770
Fixed assets $143,000
Total assets $330,000
Sales $429,000
              
Current liabilities $74,800
Long term debt $66,000
Common stock $73,700
Reatined earnings               $115,500
Total liabilities and equity $330,000
Cost og goods sold               $278,850