Question

Complete the balance sheet and sales information below for Iceberg Industries using the following financial data: Debt ratio: 50% Quick Ratio: .80x Total Assets Turnover: 2.0x Days Sales Outstanding: 36.0 days Gross Profit Margin on Sales (Sales-Cost of Goods Sold)/Sales-25% Inventory Turnover Ratio: 5.0x Balance Sheet: Cash [Select ] Accounts Receivable [ Select Inventories [Select ] Fixed Assets Select] Total Assets $300,000 Accounts Payable Select ] Long Term Debt $70,000 Common Stock [Select ]

Answer 1

Debt Ratio = Total Liabilities / Total Assets
50% = Total Liabilities / $300,000
Total Liabilities = $150,000

Total Liabilities = Accounts Payable + Long-term Debt
$150,000 = Accounts Payable + $70,000
Accounts Payable = $80,000

Total Liabilities and Equity = Total Assets
Total Liabilities and Equity = $300,000

Total Assets = Total Liabilities + Total Equity
$300,000 = $150,000 + Total Equity
Total Equity = $150,000

Total Equity = Common Stock + Retained Earnings
$150,000 = Common Stock + $97,500
Common Stock = $52,500

Total Assets Turnover = Sales / Total Assets
2.0x = Sales / $300,000
Sales = $600,000

Gross Profit Margin on Sales = (Sales - Cost of Goods Sold) / Sales
25% = ($600,000 - Cost of Goods Sold) / $600,000
Cost of Goods Sold = $450,000

Days Sales Outstanding = 360 * Accounts Receivable / Sales
36.0 = 360 * Accounts Receivable / $600,000
Accounts Receivable = $60,000

Inventory Turnover Ratio = Cost of Goods Sold / Inventories
5.0x = $450,000 / Inventories
Inventories = $90,000

Quick Ratio = (Cash + Accounts Receivable) / Accounts Payable
0.80x = (Cash + $60,000) / $80,000
Cash = $4,000

Total Assets = Cash + Accounts Receivable + Inventories + Fixed Assets
$300,000 = $4,000 + $60,000 + $90,000 + Fixed Assets
Fixed Assets = $146,000