Question

USE THE FOLLOWING INFORMATION TO CONSTRUCT A BALANCE SHEET TO ANSWER QUESTIONS 28 through 30 $ 2,000,000 20% 25 4% 45 Sales Gross profit margin Inventory turnover ratio (Cost of goods sold/Inventory) Net profit margin Average collection period Return on equity Accumulated depreciation Return on assets Accounts payable days Notes payable Gross fixed assets Percent of sales on credit (remainder are cash sales) $ 25% 75,000 12.5% $ $ 18,000 400,000 80% NOTE: Assume a 360 day year for all ratios, etc. Assume that the only accounts on the balance sheet are those listed below. Fill in this chart with the data provided and then answer questions 28, 29 and 30. Cash Notes payable Accounts receivable Accounts payable Inventory Long-term debt Gross fixed assets Equity Total liab & equity (Accumulated depreciation) Net fixed assets Total assets 28. Cash 29. Long-term debt 30. Total assets =

Answer 1

Please refer to the calculation sheet  

Assets	Amount ($)	Liabilities	Amount ($)
cash (difference)	51000	notes payable	18000
accounts receivable	200000	accounts payable	80000
inventory	64000	long-term debt (difference)	222000
gross fixed assets	400000	equity	320000
accumulated dep	-75000
net fixed assets	325000
total assets	640000	total liabilities and equity	640000

cash	$51000
long-term debt	$222000
total assets	$640000

calculation sheet (all amount in $)
gross profit margin	(gross profit / sales)*100
gross profit margin (given)	20%
sales (given)	2000000
gross profit (gross profit margin * sales)	400000
sales (given)	2000000
cost of sales (sales - gross profit)	1600000
gross profit (refer to calculation)	400000
average collection period	360/accounts receviable turnover
average collection period (given)	45
accounts receivable turnover (360 days / average collection period)	8
accounts receivable turnover	credit sales / receivables
credit sales 80%*2000000	1600000
accounts receivable turnover (refer to calculation)	8
accounts receivable (credit sales / accounts receivable turnover)	200000
net profit margin	(net income / sales)*100
net profit margin given	4%
sales	2000000
net income (net profit margin*sales)	80000
return on equity	net income / shareholders equity
return on equity	25%
net income (refer to calculation)	80000
shareholders equity (net income / return on equity)	320000
return on assets	net income / total assets
return on assets	12.50%
net income (refer to calculation)	80000
total assets (net income/return on assets)	640000
accounts payable days	(accounts payable / cost of goods sold)*360
accounts payable days	18
cost of goods sold (refer to calculation)	1600000
accounts payable (accounts payable days*cost of goods sold)/360	80000
inventory turnover	cost of goods sold / inventory
inventory turnover (given)	25
cost of goods sold (calculated as above)	1600000
inventory (cost of goods sold / inventory turnover)	64000