Complete the balance sheet and sales information using the following financial d
ID: 2820171 • Letter: C
Question
Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.1x Days sales outstanding: 35.5 daysa Inventory turnover ratio: 6x Fixed assets turnover: 2.5x Current ratio: 2.3x Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20% aCalculation is based on a 365-day year. Do not round intermediate calculations. Round your answers to the nearest cent. Balance Sheet Cash $ Current liabilities $ Accounts receivable Long-term debt 62,500 Inventories Common stock Fixed assets Retained earnings 87,500 Total assets $250,000 Total liabilities and equity $ Sales $ Cost of goods sold $
Explanation / Answer
Total Liabilities and Equity = Total Assets = $250,000
Total Assets Turnover = Sales / Total Assets
1.1 = Sales / $250,000
Sales = 1.1 x $250,000 = $275,000
(Sales - Cost of goods sold)/Sales = 20%
($275,000 - COGS)/$275,000 = 20%
($275,000 - COGS) = 0.2 x $275,000
COGS = $275,000 - $55,000 = $220,000
Inventory Turnover Ratio = Sales/Inventories
6 = $275,000 / Inventories
Inventories = $275,000/6 = $45,833.33
Days Sales Outstanding = [Accounts Receivable / Sales] x 365
35.5 = [Accounts Receivable / $275,000] x 365
Accounts Receivable = [35.5 x $275,000] / 365 = $9,762,500/365 = $26,746.58
Current Ratio = Current Assets/Current Liabilities
2.3 = [$45,833.33 + $26,746.58]/Current Liabilities
Current Liabilities = $72,579.91/2.3 = $31,556.48
Fixed Assets Turnover = Sales/Fixed Assets
2.5 = $275,000/Fixed Assets
Fixed Assets = $275,000/2.5 = $110,000
Total Debt = LTD + Current Liabilities
= $62,500 + $31,556.48 = $94,056.48
Total Equity = Total Liabilities and Equity - Total Liabilities
= $250,000 - $94,056.48 = $155,943.52
Common Stock = Total Equity - Retained Earnings
= $155,943.52 - $87,500 = $68,443.52
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.