Complete the balance sheet and sales information using the following financial d
ID: 2820612 • Letter: C
Question
Complete the balance sheet and sales information using the following financial data:
Total assets turnover: 1.3x
Days sales outstanding: 42.5 daysa
Inventory turnover ratio: 7x
Fixed assets turnover: 2.5x
Current ratio: 1.7x
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 30%
aCalculation is based on a 365-day year. Do not round intermediate calculations. Round your answer to the nearest cent.
Cash ___________ Current Liabilities ___________
Account Rec. ____________ Longterm debt 87,500
Inventories _____________ Common Stock ____________
Fixed Assets _____________ Retained Earnings 122,500
Total Assets 350,000 Total Liabilities and Equity ______________
Sales ___________ Cost of Goods Sold ______________
Explanation / Answer
Total asset turnover = Sales / Total Assets = Sales / $ 350,000 = 1.3 x
Sales = 350,000 x 1.30 = $ 455,000.
Cost of goods sold = $ 455,000 x 0.70 = $ 318,500.
Inventory Turnover = Cost of Goods Sold / Inventory = $ 318,500 / Inventory = 7 x
Inventory = $ 45,500.
Days sales outstanding = 365 / Accounts Receivable Turnover = (365 / Sales) * Accounts Receivable = (365 / 455,000 ) * Accounts Receivable = 42.5
Accounts Receivable = 42,5 x 455,000 / 365 = $ 52,980
Fixed asset turnover = Sales / Fixed Assets = $ 455,000 / Fixed Assets = 2.5
Fixed Assets = $ 455,000 / 2.5 = $ 182,000.
Current Assets = Total Assets - Fixed Assets = $ 350,000 - $ 182,000 = $ 168,000.
Cash = $ 168,000 - $ 52,980 - $ 45,500 = $ 69,520
Current ratio = Current Assets / Current Liabilities = $ 168,000 / Current Liabilities = 1.7 x.
Current Liabilities = $ 168,000 / 1.7 = 98,824.
Common Stock = $ 350,000 - $ 98,824 - $ 87,500 - $ 122,500 = $ 41,176
Assets $ Liabilities and Stockholders' Equity $ Cash 69,520 Current Liabilities 98,824 Accounts Receivable 52,980 Long Term Debt 87,500 Inventory 45,500 Total Liabilities 186,324 Total Current Assets 168,000 Common Stock 41,176 Fixed Assets 182,000 Retained Earnings 122,500 Total Assets 350,000 Total Liabilities and Stockholders Equity 350,000Related Questions
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