The following information is from Harrelson Inc.\'s, financial statements. Sales

Question

The following information is from Harrelson Inc.'s, financial statements. Sales (all credit) were $30.60 million for last year Sales to total assets Total debt to total assets Current ratio Inventory turnover Average collection period Fixed asset turnover 1.80 times 40% 2.40 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 Cash Accounts receivable Inventory Current debt Long-term debt Total debt Total current assets Fixed assets Equity Total assets Total debt and stockholders' equity

Explanation / Answer

1. sales to total assets = sales / total assets

1.80 = 30600000 / total assets

Total assets = 17000000

2. Total debt to total assets = 0.40

Total debt / total assets = 0.40

Total debt / 17000000 = 0.40

Total debt = 6800000

3. Fixed assets turnover = 5

sale / fixed assets = 5

30600000 / fixed assets = 5

  fixed assets = 6120000

4. inventory turnover = sale / ending inventory

6 = 30600000 / ending inventory

    ending inventory = 5100000

5. . Total assets = total current assets + Fixed assets

  17000000 = total current assets + 6120000

   total current assets = 10880000

6. average collection period = 19

360 / [sale / accounts receivable] = 19

360 * accounts receivable / sale = 19

    360 * accounts receivable / 30600000 = 19

360 * accounts receivable = 581400000

    accounts receivable = 1615000

7. Current ratio = current assets / current liabilities

2.4 =  10880000 / current liabilities

  current liabilities = 4533333.33

8.   Total debt and stockholder's equity = Total equity + total debt

17000000 =  6800000 + total equity

total equity = 10200000

Note:- Total debt and stockholder's equity = total assets

  Balance sheet

Amount Amount cash 4165000 Current debt 4533333.33 Accounts receivable 1615000 long term debt 2266666.67 Inventory 5100000 Total debt 6800000 Total current assets 10880000 Fixed assets 6120000 Equity 10200000 Total assets 17000000 Total debt and stockholder's equity 17000000

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