Question

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

Total assets turnover: 1.3×
Days sales outstanding: 36.5 days^a
Inventory turnover ratio: 4×
Fixed assets turnover: 2.5×
Current ratio: 2.0×
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 35%
^aCalculation 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	72,000
Inventories			Common stock
Fixed assets			Retained earnings	108,000
Total assets	$360,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total asset turnover = Sales / Total assets
1.3 = Sales / 360000
Sales = 1.3 * 360000	468000
Days sales outstanding = ( Accounts receivables / Sales ) * Days in a year
36.5 = ( Accounts receivables / 468000 ) * 365
Accounts receivables = 36.5 * 468000 / 365	46800
Gross profit margin on sales = ( Sales - Cost of goods sold ) / Sales
35% = ( 468000 - Cost of goods sold ) / 468000	163800
35% * 468000 = 468000 - Cost of goods sold
163800 = 468000 - Cost of goods sold
Cost of goods sold = 468000 - 163800	304200
Inventory turnover ratio = Cost of goods sold / Inventories
4 = 304200 / Inventories
Inventories = 304200 / 4	76050
Fixed asset turnover = Sales / Fixed assets
2.5 = 468000 / Fixed assets
Fixed assets = 468000 / 2.5	187200
Cash = Total assets - Accounts receivables - Inventories - Fixed assets = 360000 - 46800 - 76050 - 187200	49950
Total liabilities and equity = Total assets	360000
Current assets = Cash + Accounts receivables + Inventories = 49950 + 46800 + 76050	172800
Current ratio = Current assets / Current liabilities
2 = 172800 / Current liabilities
Current liabilities = 172800 / 2	86400
Common stock = Total liabilities and equity - Current liabilities - Long term debt - Retained earnings = 360000 - 86400 - 72000 - 108000	93600

Cash	49950		Current liabilities	86400
Accounts receivables	46800		Long-term debt	72000
Inventories	76050		Common stock	93600
Fixed assets	187200		Retained earnings	108000
Total assets	360000		Total liabilities and equity	360000
Sales	468000		Cost of goods sold	304200