Question

Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1x Days sales outstanding: 42 days an Inventory turnover ratio: 7x Fixed assets turnover: 2.5x Current ratio: 1.9x Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30% a calculation is based on a 365-day year. Do not round intermediate calculations. Round your answers to the nearest cent. Balance Sheet Cash $ Current liabilities $ Accounts receivable Long-term debt 50,000 Inventories Common stock Fixed assets Retained earnings 60,000 Total assets $200,000 Total liabilities and equity $ Sales $ Cost of goods sold $

Answer 1

1) Total Assets turnover = Turnover / Total assets

or, 1 = Turnover / $200,000

or, Turnover = $200,000

2) Gross Profit margin on sales = (Sales - Cost of Goods sold) / Sales

or, 0.30 = ($200,000 - Cost of Goods Sold) / $200,000

or, Cost of Goods Sold = $140,000

3) Days Sales Outstanding = (Accounts Receivable / Sales) x 365 days

or, 42 days = (Accounts Receivable / $200,000) x 365 days

or, Accounts Receivable = $23,013.69863

4) Fixed Assets turnover = Turnover / Fixed Assets

or, 2.5 = $200,000 / Fixed Assets

or, Fixed Assets = $25,000

5) Current Assets = Total Assets - Fixed Assets = $200,000 - $25,000 = $175,000

Current Ratio = Current Assets / Current Liabilities

or, 1.9 = $175,000 / Current Liabilities

or, Current Liabilities = $92,105.263158

6) Inventory Turnover = Turnover / Inventory

or, 7 = $200,000 / Inventory

or, Inventory = $28,571.428571429

7) Cash + Accounts receivable + Inventories + Fixed Assets = Total Assets

or, Cash + $23,013.69863 + $28,571.428571429 + $25,000 = $200,000

or, Cash = $123,414.8727984

8) Total liabilities and equity = Total Assets = $200,000

Current Liabilities + Long Term Debt + Common Stock = Total liabilities and equity

or, $92,105.263158 + $50,000 + Common Stock = $200,000

or, Common Stock = $57894.7368421

Balance Sheet

Cash	$123,414.87	Current liabilities	$92,105.26
Accounts receivable	$23,013.70	Long-term debt	$50,000
Inventories	$28,571.43	Common stock	$57,894.74
Fixed assets	$25,000.00	Retained earnings	$60,000.00
Total Assets	$200,000.00	Total Liabilities and Equity	$200,000.00
Sales	$200,000.00	Cost of Goods Sold	$140,000