Question

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

Total assets turnover: 1.5x
Days sales outstanding: 35 days^a
Inventory turnover ratio: 7x
Fixed assets turnover: 3.5x
Current ratio: 2.1x
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	100,000
Inventories			Common stock
Fixed assets			Retained earnings	120,000
Total assets	$400,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

Total Asset Turnover = 1.5

Sales/Total Assets = 1.5

Sales = 1.5*400,000 = $600,000

Days Sales Outstanding = 35

365*Accounts receivables/Sales = 35

Accounts Receivables = 35*600,000/365

= $57,534.25

COGS = 600,000*75% = $450,000

Inventory Turnover Ratio = 7

COGS/Inventory = 7

Inventory = 450,000/7

= $64,285.71

Fixed assets = 600,000/3.5 = $171,428.57

Balance Sheet
Cash	$106,751	Current liabilities	$108,843.54
Accounts receivable	57534.25	Long-term debt	100,000
Inventories	64285.71	Common stock	$71,156.46
Fixed assets	171428.6	Retained earnings	120,000
Total assets	$400,000	Total liabilities and equity	$400,000
Sales	600000	Cost of goods sold	450000