Question

Complete the balance sheet of Carla Vista Corporation. (Round answers to the nearest whole dollar, e.g. 125. Use 365 days for calculation.)

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Carla Vista Corporation Balance Sheet as of December 31, 2017 Liabilities and Equity: Assets: Cash and marketable securities Accounts payable and accruals Accounts receivable Notes payable 300,000 Inventory Total current assets Total current liabilities Long-term debt $2,000,000 Net plant and equipment Common stock Retained earnings $1,250,000 Total assets $8,000,000 Total liabilities and equity You have the following information: Debt ratio DSO Current ratio Inventory turnover ratio Net sales Cost of goods sold = 30 % 32 days 1.32 = 4.800 = $1.70 million = $2.3910 million

Answer 1

Carla Vista Corporation
Balance sheet as of December 31, 2017
Assets:		Liabilities and equity:
Cash and marketable securities	$2,520,834	Accounts payable and accruals	$100,000
Accounts receivable	$149,041	Notes payable	$300,000
Inventory	$498,125
Total current assets	$3,168,000	Total current liabilities	$400,000
		Long term debt	$2,000,000
Net plant and equipment	$4,832,000	Common stock	$4,350,000
		Retained earnings	$1,250,000
Total assets	$8,000,000	Total liabilities and equity	$8,000,000
As per accounting equation, total assets is equal to total liabilities and equity and thus equal to $8,000,000
Calculation of current liabilities
Debt ratio	Total liabilities/Total assets
Total liabilities	30%*8000000
Total liabilities	$2,400,000
Current liabilities	2400000-2000000
Current liabilities	$400,000
Accounts payable and accruals	Total current liabilities - Notes payable
Accounts payable and accruals	400000-300000
Accounts payable and accruals	$100,000
Calculation of common stock
Common stock	8000000-2400000-1250000
Common stock	$4,350,000
Calculation of current assets
Current ratio	Current assets/Current liabilities
Current assets	2400000*1.32
Current assets	$3,168,000
New plant and equipment	8000000-3168000
New plant and equipment	$4,832,000
Calculation of accounts receivable
Days sales outstanding	(Accounts receivable/Sales)*365
32	(Accounts receivable/1700000)*365
Accounts receivable	(32*1700000)/365
Accounts receivable	$149,041
Calculation of inventory
Inventory turnover ratio	Cost of goods sold/Inventory
4.8	2391000/Inventory
Inventory	2391000/4.8
Inventory	498,125.00
Calculation of cash and marketable securities
Cash and marketable securities	3168000-149041-498125
Cash and marketable securities	$2,520,833.90