Question

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1× Days sales outstanding: 36.5 daysa Inventory turnover ratio: 4× Fixed assets turnover: 2.5× Current ratio: 2.0× 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 dollar. Balance Sheet Cash $   Current liabilities $   Accounts receivable    Long-term debt 54,000 Inventories    Common stock    Fixed assets    Retained earnings 108,000 Total assets $360,000 Total liabilities and equity $   Sales $   Cost of goods sold $

Answer 1

BALANCE SHEET
Cash	117000	Current liabilities	108000
Accounts receivable	36000	Long term debt	54000
Inventories	63000	Common stock	90000
Fixed assets	144000	Retained earnings	108000
Total Assets	360000	Total liabilities and equity	360000
Sales	360000	Cost of goods sold	252000

Working notes:

Total asset turnover = Sales / Total assets
1 = Sales / $360,000
Sales = $360,000 * 1 = $360,000

Cost of goods sold = Sales * (1 - gross profit margin) = $360,000 * (1 - 0.30) = $252,000

Fixed asset = Sales / Fixed asset turnover = $360,000 / 2.5 = $144,000

Current assets = Total assets - fixed assets = $360,000 - $144,000 = $216,000

Current liabilities = Current asset / current ratio = $216,000 / 2 = $108,000

Total liabilities and equity = Total assets = $360,000

Common stock = Total liabilities and equity - Retained earnings - long term debt - current liabilities
= $360,000 - $108,000 - $54,000 - $108,000
= $90,000

Inventory = Cost of goods sold / inventory turnover = $252,000 / 4
= $63,000

Accounts receivable = (Sales / 365) * days sales outstanding = ($360,000 / 365) * 36.5 = $36,000

Cash = Total current assets - inventories - accounts receivable = $216,000 - $63,000 - $36,000 = $117,000