Question

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.3x Days sales outstanding: 37 daysa Inventory turnover ratio: 6x Fixed assets turnover: 3.5x Current ratio: 1.9x 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 80,000 Inventories    Common stock    Fixed assets    Retained earnings 140,000 Total assets $400,000 Total liabilities and equity $   Sales $   Cost of goods sold $

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Answer 1

1)Total asset turnover = Sales /Total asset

    1.30 = sales /400000

     sales = 400000*1.30 = 520000

2)Inventory turnover ratio = Sales /Inventory

      6 = 520000/Inventory

   Inventory = 520000/6 = 86667

3)Fixed asset turnover =sales /Fixed asset

     3.5 = 520000/Fixed asset

     Fixed asset = 520000/3.5

                = 148571

4)Days sales outstanding = 365 *Accounts receivable /sales

   37 = 365*AR/520000

     Accounts receivable = 520000*37/365

              = 52712

5)Total asset= cash +Accounts receivable+Inventories+Fixed asset

       400000=cash + 52712+86667+148571

      400000 =cash + 287950

    cash = 400000-287950

        = 112050

6)Current ratio = Current asset/current liabilities

     1.9 = (112050+52712+86667)/CL

     CL = 251429/1.9

   CURRENT liabilities = 132331

7)Total liabilities and equity =total asset = 400000

Total liabilities and equity= CURRENT liabilities+long term debt+common stock+retained earning

400000= 132331+80000+common stock +140000

common stock =400000-132331-80000-140000

      =47669

8)Cost of goods sold =sales (1-gross profit margin)

             =520000(1-.25)

            = 390000

Balance sheet
cash	112050	current liabilities	132331
Accounts receivable	52712	long term debt	80000
Inventories	86667	common stock	47669
Fixed asset	148571	retained earning	140000
Total asset	400000	Total liabilities and equity	400000
sales	520000	cost of goods sold	390000