Question

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

Total assets turnover: 1.4x
Days sales outstanding: 33 days^a
Inventory turnover ratio: 4x
Fixed assets turnover: 3.5x
Current ratio: 1.6x
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	33,750
Inventories			Common stock
Fixed assets			Retained earnings	56,250
Total assets	$225,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total asset turnover = Sales / Total assets
1.4 = Sales / 225000
Sales = 225000*1.4	315000
Fixed asset turnover = Sales / Fixed assets
3.5 = 315000/Fixed assets
Fixed assets = 315000/3.5	90000
Gross profit = Sales *25%
Gross profit = 315000*25%	78750
Cost of goods sold = Sales - Gross profit = 315000 - 78750	236250
Current assets = Total assets - Fixed assets = 225000-90000	135000
Inventory turnover ratio = Cost of goods sold / Inventory
4 = 236250 / Inventory
Inventory = 236250/4	59062.50
Days sales outstanding = (Accounts receivables / Sales)*Days in a year
33 = (Accounts receivables/315000)*365
Accounts receivables = 33*315000/365	28479.45
Current assets = Cash + Inventory + Accounts receivables
135000 = Cash + 59062.50 + 28479.45
Cash = 135000 - 59062.50 - 28479.45	47458.05
Current ratio = Current assets / Current liabilities
1.6 = 135000/Current liabilities
Current liabilities = 135000/1.6	84375
Total assets = Total liabilities and equity	225000
Total liabilities and equity = Current liabilities + Long term debt + Common stock + Retained earnings
225000 = 84375+33750+Common stock+56250
Common stock = 225000-84375-33750-56250	50625

Balance sheet
Cash	47458.05	Current liabilities	84375
Accounts receivables	28479.45	Long term debt	33750
Inventories	59062.50	Common stock	50625
Fixed assets	90000	Retained earnings	56250
Total assets	225000	Total liabilities and equity	225000
Sales	315000	Cost of goods sold	236250