Question

BALANCE SHEET ANALYSIS Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.4x Days sales outstanding: 40.5 days Inventory turnover ratio: 7x Fixed assets turnover: 2.5x Current ratio: 2.4x 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 Current liabilities $ Cash Accounts receivable 37,500 Long-term debt Inventories Common stock Retained earnings Fixed assets 87,500 Total assets Total liabilities and equity $250,000 $ Sales Cost of goods sold

Answer 1

Total asset turnover = Sales / Total assets
1.4 = Sales / 250000
Sales = 1.4 * 250000	350000
Days sales outstanding = ( Accounts receivables / Sales ) * Days in a year
40.5 = ( Accounts receivables / 350000 ) * 365
Accounts receivables = 40.5 * 350000 / 365	38835.62
Gross profit margin on sales = ( Sales - Cost of goods sold ) / Sales
25% = ( 350000 - Cost of goods sold ) / 350000
25% * 350000 = 350000 - Cost of goods sold
87500 = 350000 - Cost of goods sold
Cost of goods sold = 350000 - 87500	262500
Inventory turnover ratio = Cost of goods sold / Inventories
7 = 262500 / Inventories
Inventories = 262500 / 7	37500
Fixed asset turnover = Sales / Fixed assets
2.5 = 350000 / Fixed assets
Fixed assets = 350000 / 2.5	140000
Cash = Total assets - Accounts receivables - Inventories - Fixed assets = 250000 - 38835.62 - 37500 - 140000	33664.38
Total liabilities and equity = Total assets	250000
Current assets = Cash + Accounts receivables + Inventories = 33664.38 + 38835.62 + 37500	110000
Current ratio = Current assets / Current liabilities
2.4 = 110000 / Current liabilities
Current liabilities = 110000 / 2.4	45833.33
Common stock = Total liabilities and equity - Current liabilities - Long term debt - Retained earnings = 250000 - 45833.33 - 37500 - 87500	79166.67

Cash	33664.38		Current liabilities	45833.33
Accounts receivables	38835.62		Long-term debt	37500
Inventories	37500		Common stock	79166.67
Fixed assets	140000		Retained earnings	87500
Total assets	250000		Total liabilities and equity	250000
Sales	350000		Cost of goods sold	262500