Question

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

Total assets turnover: 1.2×
Days sales outstanding: 73.0 days^a
Inventory turnover ratio: 4×
Fixed assets turnover: 3.0×
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	31,500
Inventories			Common stock
Fixed assets			Retained earnings	73,500
Total assets	$210,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total Assets turnover =1.2(given)

The total assets are given as $210,000

Total Assets turnover ratio =ales /Total Assets =1.2

So Sales =210,000*1.2=$252,000

Days Sales outstanding =Average Receivables /credit sales*365=73 days

Since sales =$252,000 , $252,000*73 =Average receivables *365

So $18,396,000/365 =Average Accounts Receivable=50,400

Gross margin =Gross profit /Sales =30%

So Gross profit =.3*252,000=$75,600

Sales -COGS =Gross profit

So Sales -Gross profit =COGS , COGS(Cost Of Goods Sold) =$252,000-$75,600=$176,400

Inventory Turnover ratio =4

Inventory Turnover ratio =COGS/Inventory =4

COGS =$176,400 So Inventory =$176,400/4=$44,100

Fixed Asset Turnover ratio =3 times

That s Sales /Fixed Assets =3

Since Sales =$252,000 Fixed Assets would be $252,000/3=$84,000

Total Assets =Current Assets +Fixed Assets ,Fixed assets =$84,000 Total Asset =$210,000

So Current Assets would be $210,000-$84,000=$126,000

Current Assets =Cash +Account receivable +Inventory

Account Receivable =$50,400 Inventory =$44,100

So Cash =Current Assets -Accounts receivable -Inventory That's $126,000-$50,400-$44,100=$31,500

Given Current ratio =Current Assets /Current Liability =2

Since Current Assets =$126,000 Current Liability =$126,000/2=$63,000

Long term debt given as $31,500

So Total Liability =Current liability+long term debt=$31,500+$63,000=$94,500

Total Assets =Total Liability +Total Equity

Assets =$210,000 Liability =$94,500

So Total Assets -Total liability =Equity , Equity would be $210,000-$94,500=$115,500

Total Equity =Common Stock + Retained Earnings

Retained Earnings given as $73,500

So Common Stock =$115,500-$73,500=$42,000

Total Liabilities and Equity =Total Liability+ Total Equity =$94,500+$115,500=$210,000