Problem 3-11 Balance Sheet Analysis Complete the balance sheet and sales informa
ID: 2659689 • Letter: P
Question
Problem 3-11
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: 1.6
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25%
Total liabilities-to-assets ratio: 55%
Quick ratio: 0.95
Days sales outstanding (based on 365-day year): 30.5 days
Inventory turnover ratio: 7.0
Round your answers to the nearest whole dollar.
Balance Sheet
Statement
Information Sales $ Cost of goods sold $ 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: 1.6 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25% Total liabilities-to-assets ratio: 55% Quick ratio: 0.95 Days sales outstanding (based on 365-day year): 30.5 days Inventory turnover ratio: 7.0 Round your answers to the nearest whole dollar.
Explanation / Answer
Total liabilities to total assets ratio=55%
Or Total liabilities=55%*400000
=$220000
Hence long term debt+Accounts payable=$220000
Or accounts payable=$220000-50000
=$170000
Common stock=Total liabilitiesand equity-long term debt-Accounts payable-Retained earnings
=$400000-50000-170000-100000
=$80000
Quick ratio=0.95
Or accounts receivable+cash/Accounts payable=0.95
or 53479+Cash/170000=0.95
Or cash=108021
Hence Fixed assets=total assets-accounts receivable-Cash-Inventory
=400000-53479-108021-68571
=169929
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