Question

Balance Sheet Analysis Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 2.3 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30% Total liabilities-to-assets ratio: 45% Quick ratio: 1.25 Days' sales outstanding (based on 365-day year): 36.5 days Inventory turnover ratio: 3.00 Do not round intermediate calculations. Round your answers to the nearest whole dollar. Partial Income Statement Information Sales Cost of goods sold Balance Sheet Cash Accounts payable Accounts receivable Long-term debt $ 50,000 Inventories $ Common stock Fixed assets $ Retained earnings $ 100,000 Total assets $ 400,000 Total liabilities and equity $ $

Answer 1

total asset turnover	sales /total asset turnover	2.3 = sales/400000	sales =400000*2.3	920000
cost of goods sold ratio to sales	1-gross profit rate	1-.3		0.7
cost of goods sold	sales*cost of goods sold ratio to sales	900000*.7		644000
Inventory turnover ratio = cost of goods sold/inventory	3 = 644000/Inventory	Inventory = 644000/3	214667
days sales outstanding =365/accounts receivable turnover ratio	36.5 = 365/accounts receivable turnover ratio	accounts receivable turnover ratio = 365/36.5	10
Accounts receivables turnover ratio = sales/accounts receivables	10 = 920000/accounts receivables	accounts receivables = 920000/10	92000
total liabilities to asset ratio = total of liabilities/total assets	45% = total of liabilities/400000	total of liabilities =400000*45%	180000
Accounts payable = total of liabilities-long term debt	180000-50000		130000
Quick ratio =total of quick assets/total of current liabilities	1.25 = total of quick assets/total of current liabilities	1.25 = total of quick assets/130000	total of quick assets = 355000*1.25	162500
cash = total of quick assets-accounts receivables	cash = 162500-92000	70500
sales		920000
cost of goods sold		644000
Balance sheet
Assets				Accounts Payable		130000
cash		70500		Long term debt		50000
Accounts receivables		92000		common stock	400000-130000-50000-100000	120000
Inventory		180000		retained earning		100000
fixed assets	400000-70500-92000-180000	57500
total assets		400000		total liability and equity		400000