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USE THE FOLLOWING INFORMATION TO FILL IN THE BALANCE SHEET BELOW TO ANSWER QUESTIONS 31 through 34 60 Number of shares outstanding Sales Gross profit margin Inventory turnover ratio Notes payable Net profit margin Return on assets 15,000 $200,000 20% 4 $10,000 15% 7.5% Average collection period (days) Accounts payable days Retained earnings (2018) Dividend payout ratio Accruals Current ratio Debt ratio 90 $23,700 80% $5,000 1.5 40% Note: Of total sales, 60 percent are on credit and the remainder are cash sales. Assume a 360-day year. All data in the table above, unless otherwise stated, is for the year 2019. Hodun, Inc. Balance Sheet for the Year Ending December 31, 2019 Cash Notes payable Accounts receivable Accounts payable Inventory Accruals Net fixed assets Long-term debt Total assets Common stock ($2 par value) Capital surplus Retained earnings Total liab. & equity 31. Cash = 32. Long-term debt = 33. Total assets = 34. Capital surplus =

Answer 1

Answer:

Total sales	$200,000
Credit sales (60% of total sales)	120,000
Average collection period	60days
Formula of Average collection period	360*Account receivable/Credit Sales
Computation of Account receivable	60 =360 * Account receivable/120,000 Account receivable = (120,000*60) / 360 = $20,000
Account receivable	$20,000
Total Sales	$200,000
Less:Gross profit margin 20%	( 40,000)
Cost of goods sold	$160,000
Inventory turnover ratio	4
Formula of Inventory turnover ratio	Cost of goods sold/Inventory 4 = 160,000/Inventory Inventory = 160,000/4 Inventory = 40,000
Inventory	$40,000
Net profit (15 % of sales)	15% of $200,000 = $30,000
Formula of Return on assets	Net profit/Total assets *100
Return on asset	7.5% 7.5 = 30,000/Total assets *100 Total assets = (30,000*100) / 7.5 =$400,000
Total assets	$400,000
Account payable	60days
Formula of Account Payable ratio	Account payable days = 360*Account Payable/cost of goods sold 60=(Account Payable*360)/160,000 Account payable = (160,000*60)/360 =$26,667
Dividend payout ratio	80%
Formula of dividend payout ratio	Dividend paid/Net income*100 80 = Dividend paid/30,000 *100 Dividend paid = (30,000*80)/100 = $24,000
Debt ratio	40%
Formula of debt ratio	Total liabilities/ Total assets *100
Tota liabilities	Total assets = $400,000(as calculated above) 40 = (Total liabilities/400,000) *100 Total liabilities = 400,000*40/100 $160,000
Total current liabilities	Account Payable + Notes payable + Accruals $26,667+$10,000+$5,000 =$41,667
Long term debt	Total liabilities - current assets 160,000-41667 = $118,333
Current ratio	1.5 times
Formula of current ratio	current assets/ current liabilities
Current assets	current assets/41,667 = 1.5 Current assets = 62,500
Cash	current assets- (Account receivable +Inventory) 62,500-(20,000+40,000) = $2,500
Net fixed assets	Total assets - current assets 400,000-62,500 $337,500
Retained earning (2019)	Retained earning (2018)+Net income - Dividend paid $23,700+$30,000-$24,000 $29,700
Capital surplus	Balancing figure

Balance sheet for the year ended,2019

Cash	$2,500	Notes payable	$10,000
Account receivable	20,000	Account payable	26,667
Inventory	40,000	Accruals	5,000
Net fixed assets	337,500	Long term debt	118,333
		Common stock $2 at par value (Number of outstanding shares = 15,000 shares)	30,000
		Capital surplus	180,300
		Retained earning	29,700
Total assets	400,000	Total liabilities and equity	400,000