Question

In: Finance

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1x...

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 $   

Solutions

Expert Solution

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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