Question

BALANCE SHEET ANALYSIS

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

Total assets turnover: 1.5x
Days sales outstanding: 33.5 days^a
Inventory turnover ratio: 5x
Fixed assets turnover: 3x
Current ratio: 2.5x
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	52,500
Inventories			Common stock
Fixed assets			Retained earnings	87,500
Total assets	$350,000		Total liabilities and equity	$
Sales	$		Cost of goods sold	$

Answer 1

solution : WiN-1 Calculation of Net sales, Total Asset tumover=1.5 (Asgiven) Total Assets = $350,000 (As given) Total Asset tumorer Net Sales Total Aset 1.5. Net sales. Net sales = 15x $350 000 $350,000 Netsales = $525000 WiN-2 calculation of Account Receivable Daye sales outstanding = 33,5 days (As given) Net Sales = $525,000 ( W.N-1) Ausurt Receivable x365 Days Sales outstanding = Selon Sales . Account Receivable X365 $525000 - Account Receivable = '$S25000 233.3 - $48184.93 365 Account Receivables $40,184.93 WN-3. Calculation of Inventory Inventory tumover Ratio = 5 (As given) cost of grochsold = $ 393,750 (W.N-5) I'nventory tumorer Ratio - cost of grobsold 10 Average threm ventary 8 15.

5 = $393,750 - Average Inventory niter - 8393,750 W.N-4 Average Inventory-$707501 Nole Assume that opening and closing Inventory as same so Inventory wiu be equal to $78,750 calculation of Goonprofit Cenonprofit margin on sales = 25% (Asgiven) 6.0.25 Gross profit Gross profit = Gross profit = sales. coross profit= $S25D0D XD. 25 0.25 – Goon profit $525000(W.N-1) Gross profit= $131,250 W.N-S Calculation of cost of groch sold. Sales - $525000 (W.N-1) Gross boo frit = $131250 (W.N-Y) Costif gruch sold = sales- Gron profit Cost of grieholde $525000 - $131250 Cost grochsold = $393,50 Total Loasilities and equity Calculation of WiN-s Total Assets = Total Liabilities ardequity $350900 (As gyven) = Total Liabilties and equity 25

- Netsales W.N-T Calculation of fixed Asset Fixed Assets tumoverratto = . . Arerage rixed Assets fired Ahets tumores = 3 (As given) · Netsates = $ 525000 (W.N-1) Average. Nel fixed Asset - Netsales -$525000 3 fixed Anets tumores Ratto Average Net fixed Anebs = $175000/ - Assume that opening and closing fixed Assets are pame · So fixed Assets = $175000 Wino Calculations of current Asset Total Anets fixed Aneh ot C/A le. Current Asset . (As given) .. . (WiN-7) . $350000 = $175000 + current Aneb ii Current Assets = $350000 $175000 . Current Aset = $175000 Recevable W.N. 9 calculation of cam . Current Assets = Inventaries + Account t cash. (W.18). (W.N-3) (W.N.2) : $175000 = $78750.00 + $48,184.93 Flash Tart= $48065.07 315

W.N-10 Calculation of current labilities Current Ratio = Cument Assets Current liabfuties. 2.5(As given) - $ 175000 (W.N-O). ma current liability Current liability = $175000 = $70000 Current liability = $ 70000 W.Nel calculation of commonrotock common Longtem + current t Debt Uabutus Total liabilities Retalned, aminas T srock and equity $3.50000 (WN-6) $07500 + common + $52500 + $70000 daivenl' stock . (As given) (WIN-10) (Asgiren) .. $350000 = $210000 + common stock $350000 - $210000 = Commonstock $140000 = commenstock

Balance sheet Cash. $4806 $70000-00 I WiN-a) Current Labiul (W.N-10) Long term Debt 1. (Asgiven) $ 52,900.00 $48184.93 Account Receivable CW.N2) $78,750.00 $140000.00 Inventorses... (Win-3) common stock (W. ND Retained earnings $ 87500.00 $175000.00 Fixed Assets CwN-7) . (As given) $350000.00 $350,000.00 Total L'abilities and equity Total Aneh (As given) ( WN-by $393,750 Sales $525.000 .00 cost of goodsold | |-N-5) (W.N-1)