Question

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1x Days sales outstanding: 36.5 days Inventory turnover ratio: 5x Fixed assets turnover: 3.0x Current ratio: 2.0x Gross profit margin on sales: (Sales - Cost of goods sold)/Sales-30% Calculation is based on a 365-day year Do not round intermediate calculations. Round your answers to the nearest dollar Balance Sheet Cash Current liabilities $ Accounts receivable Long-term debt 45,000 Inventories Common stock Fixed assets Retained earnings 75,000 Total assets Total liabilities and equity $300,000 $ Sales Cost of goods sold $

Answer 1

Balance Sheet
Cash	$128,000	Current Liabilities	$100,000
Accounts Receivables	$30,000	Long Term Debt	$45,000
Inventories	$42,000	Common Stock	$80,000
Fixed Assets	$100,000	Retained Earnings	$75,000
Total Assets	$300,000	Total liabilities & equity	$300,000
Sales	$300,000	Cost of goods sold	$210,000

Total Assets = Total liabilities and equity

Thus total liabilities and equity = $300,000

Total Asset Turnover ratio = Sales/Total Assets = 1x. Thus, Sales = Total Assets

Total Assets = $300,000. Thus, Sales = $ 300,000

Gross profit margin = 30% = (Sales - Cost of Goods Sold) / Sales

Thus, 30% x Sales = Sales - Cost of goods sold. Cost of Goods Sold = 70% of Sales

Thus, Cost of goods sold = 70% x $300,000 = $210,000

Inventory turnover ratio = Cost of Goods sold/Total inventory = 5x

$210,000/ total inventory = 5. Total inventory = $210,000/5 = $42,000

Days of sales outstanding = (Accounts Receivables/Sales) * 365 = 36.5

Accounts Receivables/Sales = (36.5/365) = 1/10

Accounts Receivables = Sales/10 = $300,000/10 = $30,000

Current Assets = Cash + Accounts Receivables + Inventories or Total Assets - Fixed Assets

Current Assets = $300,000 - $100,000 = $200,000

Thus, Cash + Accounts Receivables + Inventories = $200,000

Thus, Cash + $30,000 + $42,000 = $200,000

Cash = $200,000 - $72,000 = $128,000

Current Ratio = Current Assets / Current Liabilities = 2x

Current Assets = 2 * Current Liabilities

Current Liabilities = 0.5 * Current Assets

Thus, current liabilities = 0.5 * $200,000 = $100,000

Total liabilities and equity = Current Liabilities + long term debt +common stock + Retained Earnings

$300,000 = $100,000 + $45,000 + Common Stock + $75,000

Common Stock = $300,000 - $100,000 - $45,000 - $75,000

Common Stock = $80,000