Question

In: Finance

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.3x...

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

Total assets turnover: 1.3x
Days sales outstanding: 36 daysa
Inventory turnover ratio: 7x
Fixed assets turnover: 3.5x
Current ratio: 2.3x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 15%
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 45,000
Inventories    Common stock   
Fixed assets    Retained earnings 90,000
Total assets $300,000 Total liabilities and equity $  
Sales $   Cost of goods sold $  

Solutions

Expert Solution

Ans :

1. Total assets turnover ratio = net sales / Total assets

1.3 = Net sales / Total assets

Net Sales = Total assets * 1.3

Net sales = $ 300,000 * 1.3

= $ 390,000

2. Gross Profit margin on sales = 15 %

(Sales - Cost of goods sold) / Sales = 15 %

(390000 - Cost of goods sold) / 390000 = 15 %

390000 - Cost of goods sold = 390000*15%

Cost of goods sold = 390000 - 390000 *15%

Cost of goods sold = 390000 - 58500

COst of goods sold = $ 331,500

3. INventory Turnover ratio = 7

Cost of goods sold / Inventory = 7

$ 331500 / 7 = Inventory

Inventory = $ 47357.14

4. Fixed asset turnover ratio = 3.5

Fixed assets turnover = Net sales / Fixed assets

3.5 = 390000 / Fixed assets

Fixed assets = 390000 / 3.5

Fixed assets = $ 111428.57

5. Days sales outstanding = accounts receivalbe / Net Credit Sales * 365 days

36 = Accounts receivable / 390000 * 365

Accounts receivable = 36 * 390000 / 365

= $ 38,465.75

6. Current assets = Total assets - Fixed assets

= $ 300,000 - $ 111,428.57

= $ 188,571.43

Current assets = Cash + Inventory + Accounts receivable

$ 188571.43 = Cash + $ 47,357.14 + $ 38,465.75

Cash = $ 102,748.54

7. Current ratio = Current assets / Current liabilities

2.3 = $ 188571.43 / Current liabilities

Current liabilities = $ 188571.43 / 2.3

= $ 81,987.58

8. Total assets = Total liabilities and equity

= 300,000

Common stock = Total liabilities and equity - Current liablities - Long term debt - retained earnings

= $ 300,000 - $ 81,987.58 - $ 45,000 - $ 90,000

= $ 83,012.42

Balance sheet
Cash 102748.54
Accounts receivable 38465.75 Current liabilities 81987.58
Inventories 47357.14 Long term debt 45000
Total current assets 188571.43 Common stock 83012.42
Fixed assets 111428.57 Retianed earnings 90000
Total assets 300000 Total liabilities and equity 300000
Sales 390000 Cost of goods sold 331500

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