Question

The following information is from Harrelson Inc.'s, financial statements. Sales (all credit) were $18.00 million for last year. Sales to total assets Total debt to total assets Current ratio Inventory turnover Average collection period Fixed asset turnover 1.50 times 45% 2.90 times 6 times 19 days 5 times Complete the balance sheet: (Use a 360-day year. Do not round intermediate calculations. Input your answers in millions rounded to 2 decimal places.) $ in millions $ in millions Current debt 0.90 Long-term debt Total debt $ 5.40 Cash Accounts receivable Inventory Total current assets Fixed assets Total assets $ Equity 12.00 Total debt and stockholders' equity

Answer 1

Ans: Total Sales= $18 million

Sales to Total Assets= 1.50 times

Sales/ total Assets= 1.50

18/total Assets= 1.50

Total Assets= 18/1.50

Total Assets= $12 million

Total Debt to total Assets=45%

Total Debt= 45% * $12 million

Total Debt= $5.40 Million

Total Assets Equals total debt and stockholder Equity therefore Both will be $12 million and Total debt sums with equity will also be $12 million

Fixed Assets Turnover= 5 times

Fixed Assets= Sales/5

Fixed Assets= 18 million/5

Fixed Assets= 3.60 Million

We know that ,Fixed Assets+ current Assets= total Assets

$3.60 million+ Current Assets= $12

Current Assets= 8.40 Million

Current ratio= Current Assets/current liabilities

2.90 times= 8.40 Million/Current Liabilities

Current liabilities or current Debt = 2.89 million

Total Debt= Long term debt+ current Debt

5.40= Long term debt+ 2.90

Long term debt= 2.50 million

=> Inventory turnover= Sales/ Inventory

18 million/inventory= 6

Inventory= 3 million

=> Average collection period= Average receivables/net Sales*365

=> Average receivables/18 *360=19

=> Average Receivables= 0.95million

=> Average Receivables or Accounts Receivable= 0.95 million

We know: Cash+ Account receivables+ Inventory= current Assets

=> Cash+ 0.95+3.00= 8.40

=> Cash= 4.45 Million

Assets	Amount{in millions}	Liabilities	Amount{In millions}
Cash	$4.45	Current Debt	$2.90
Account receivable	$0.95	Long term Debt	$2.50
Inventory	$3.00	Total Debt	$5.40
Total Current Assets	$8.40
Fixed Assets	$3.60	Equity	$6.60
Total Assets	$12	Total Debt and Stockholder Equity	$12