Constructing a pro forma balance sheet) Use the following industry average ratio
ID: 2819460 • Letter: C
Question
Constructing a pro forma balance sheet) Use the following industry average ratios The company's cost of goods sold is $ 2674,000 (Round to the nearest dollar.) The company's total assets are $ 2,010,526. (Round to the nearest dollar.) The company's fixed assets are $ 779,592. (Round to the nearest dollar.) The company's accounts receivable is $ 98.378. (Round to the nearest dola.) The company's inventories are $ 862,581. (Round to the nearest dollar.) The company's current liabilities are $ 492,374. (Round to the nearest dolar.) The company's total lablities are $ 985,158. (Round to the nearest dollar) Data Table 1.9 times D Total asset turnover Average collection period (assume a 365-day year) Fixed asset turnover Inventory turnover (based on cost of goods sold) Current ratio Sales (all on credit) Cost of goods sold Debt ratio 9.4 days 4.9 times 3.1 times 2.5 times $3.82 million 70% of sales 49% Complete Mendoza Distributors balance sheet below (Round to the nearest dollar,) Print Done Mendoza Distributors Pro Forma Balance Sheet Cash Current liabilities Long-torm debt Total liablities Accounts receivable Inventory Enter any number in the edit fields and then click Check Answer. Clear All Check Answer All parts showingExplanation / Answer
Total Asset Turnover = Sales / Total Assets
1.9 = $3,820,000 / Total Assets
Total Assets = $2,010,526
Average Collection Period = 365 * Accounts Receivable / Sales
9.40 = 365 * Accounts Receivable / $3,820,000
Accounts Receivable = $98,378
Fixed Asset Turnover = Sales / Net Fixed Assets
4.9 = $3,820,000 / Net Fixed Assets
Net Fixed Assets = $779,592
Cost of Goods Sold = 70% * Sales
Cost of Goods Sold = 70% * $3,820,000
Cost of Goods Sold = $2,674,000
Inventory Turnover = Cost of Goods Sold / Inventory
3.1 = $2,674,000 / Inventory
Inventory = $862,581
Total Assets = Cash + Accounts Receivable + Inventory + Net Fixed Assets
$2,010,526 = Cash + $98,378 + $862,581 + $779,592
Cash = $269,975
Current Assets = Cash + Accounts Receivable + Inventory
Current Assets = $269,975 + $98,378 + $862,581
Current Assets = $1,230,934
Current Ratio = Current Assets / Current Liabilities
2.5 = $1,230,934 / Current Liabilities
Current Liabilities = $492,374
Total Debt = 49% * Total Assets
Total Debt = 49% * $2,010,526
Total Debt = $985,158
Total Debt = Current Liabilities + Long-term Debt
$985,158 = $492,374 + Long-term Debt
Long-term Debt = $492,784
Total Assets = Total Liabilities + Common Equity
$2,010,526 = $985,158 + Common Equity
Common Equity = $1,025,368
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