Complete the balance sheet and sales information in the table that follows for J

Question

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: TOTAL ASSETS turnover: 1.5 Gross profit margin on sales: (Sales - COGS)/sales = 25% Total Liabilities-to-assets ratio: 40% Quick ratio: 0.80 Days sales outstanding (based on 365-day year) 36.5 days Inventory turnover ratio: 375 Partial Income Stmt Info Sales COGS Balance Sheet Cash Acct Recv Accounts Payable Inventories Long-Term debt Fixed Assets Common Stock Total Assets Retained Earnings Total Liab & Equity

Explanation / Answer

1. Debt = (0.60) (Total assets) = (0.60)($400,000) = $240,000.

2. Accounts payable = Debt Long-term debt = $240,000 - $50,000 = $190,000

3. Common stock =Total liabilities and equity - Debt - Retained earnings

= $400,000 - $240,000 - $100,000 = $60,000.

4. Sales = (1.5) (Total assets) = (1.5)($400,000) = $600,000.

5. Inventory = Sales/5 = $600,000/3.75 = $160,000.

6. Accounts receivable = (Sales/365)(DSO) = ($600,000/365)(36.5) = $60,000.

7. Cash + Accounts receivable = (0.80)(Accounts payable)

Cash + $60,000 = (0.80)($190,000)

Cash = $152,000 - $60,000 = $92,000.

8. Fixed assets = Total assets - (Cash + Accts rec. + Inventories)

= $400,000 - ($92,000 + $60,000 + $160,000) = $88,000.

9. Cost of goods sold = (Sales)(1 - 0.25) = ($600,000)(0.75) = $450,000

10. Total Assets = Total Liabilities & Equity = 400,000

Assets Amount ($) Liabilities & Equity Amount ($) Cash 92,000 Accounts payable 190,000 Accounts receivable 60,000 Long-term debt 50,000 Inventory 160,000 Common stock 60,000 Fixed assets   88,000 Retained earnings 100,000 Total Assets 400,000 Total Liabilities & Equity 400,000 Sales 600,000 Cost of Goods Sold 450,000

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