Question

Complete the balance sheet and sales Information using the following financial data: Total assets turnover: 1.5x Days sales outstanding: 34.5 days Inventory turnover ratio: 5x Fixed assets turnover: 3.5x Current ratio: 2.1x Gross profit margin on sales: (Sales - Cost of goods sold)/Sales - 35% Calculation 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 45,000 Inventories Common stock Fixed assets Retained earnings 105,000 Total assets $300,000 Total liabilities and equity Sales Cost of goods sold

Answer 1

Total Assets Turnover = Sales / Total Assets

1.5 = Sales / $300,000

Sales = 1.5 * $300,000 = $450,000

Gross profit margin on sales = (Sales - Cost of goods sold)/Sales

0.35 = ($450,000 - Cost of goods sold) / $450,000

0.35 * $450,000 = $450,000 - Cost of goods sold

Cost of goods sold = $450,000 - $157,500 = $292,500

Fixed Assets Turnover = Sales / Fixed Assets

3.5 = $450,000 / Fixed Assets

Fixed Assets = $450,000 / 3.5 = $128,571.43

Current Assets = Total Assets - Fixed Assets = $300,000 - $128,571.43 = $171,428.57

Current Ratio = Current Assets / Current Liabilities

2.1 = $171,428.57 / Current Liabilities

Current Liabilities = $171,428.57 / 2.1 = $81,632.65

Total Assets = Total Liabilities and equity = $300,000

Common Stock = Total Liabilities and equity - Current Liabilities - Long-term debt - Retained earnings

= $300,000 - $81,632.65 - $45,000 - $105,000 = $68,367.35

Inventory turnover ratio = Sales / Inventory

5 = $450,000 / Inventory

Inventory = $450,000 / 5 = $90,000

Days Sales Outstanding = 365 / [Sales / Accounts receivable]

34.5 = 365 / [$450,000 / Accounts Receivable]

$450,000 / Accounts Receivable = 365 / 34.5

Accounts Receivable = $450,000 / 10.58 = $42,534.25

Cash = Current Assets - Inventory - Accounts Receivable

= $171,428.57 - $90,000 - $42,534.25 = $38,894.32

Balance Sheet
Cash	$38,894.32		Current liabilities	$81,632.65
Accounts receivable	$42,534.25		Long-term debt	$45,000.00
Inventories	$90,000.00		Common stock	$68,367.35
Fixed assets	$128,571.43		Retained earnings	$105,000.00
Total assets	$300,000.00		Total liabilities and equity	$300,000.00
Sales	$450,000.00		Cost of goods sold	$292,500.00