In: Finance
Complete the balance sheet and sales information using the
following financial data:
Total assets turnover: 1x
Days sales outstanding: 38 daysa
Inventory turnover ratio: 4x
Fixed assets turnover: 2.5x
Current ratio: 2x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales =
25%
aCalculation is based on a 365-day year. Do not round
intermediate calculations. Round your answer to the nearest
cent.
Balance Sheet | ||||
Cash | $ | Current liabilities | $ | |
Accounts receivable | Long-term debt | 56,250 | ||
Inventories | Common stock | |||
Fixed assets | Retained earnings | 67,500 | ||
Total assets | $225,000 | Total liabilities and equity | $ | |
Sales | $ | Cost of goods sold | $ |
Total assets turnover = 1
Sales / Total assets = 1
Therefore Sales = Total assets = 225000
Therefore COGS = Sales x (1-25%) = 168750
Inventory turnover ratio= 4
Sales / Inventory = 4
Therefore Inventory = Sales / 4 = 225000 /4 = 56250
Fixed assets turnover: 2.5
Sales / Fixed assets = 2.5
Therefore Fixed assets = Sales / 2.5 = 225000 / 2.5 = 90000
Days sales outstanding: 38 days
Therefore Accounts receivables= Sales x 38 / 365 = 225000 * 38 / 365 = 23425
Therefore Cash = total assets - fixed assets - inventory - Accounts receivables = 225000 - 90000 - 56250 - 23425
Therefore Cash = 55,325
Current assets = Total assets - fixed assets = 225000 - 90000 = 135000
Current liabilities = current assets / current ratio = 135000 / 2 = 67500
Total liabilities and equity = Total assets = 225000
Therefore common stock = Total liabilities and equity - Current liabilities - Long term debt - retained earnings
Therefore common stock = 225000 - 67500 - 56250 - 67500 = $ 33,750
Balance Sheet | Amount ($) | Amount ($) | ||
Cash | 55,325 | Current liabilities | 67,500 | |
Accounts receivable | 23,425 | Long-term debt | 56,250 | |
Inventories | 56,250 | Common stock | 33,750 | |
Fixed assets | 90,000 | Retained earnings | 67,500 | |
Total assets | 225,000 | Total liabilities and equity | 225,000 | |
Sales | 225,000 | Cost of goods sold | 168,750 |
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