USE THE FOLLOWING INFORMATION TO CONSTRUCT A BALANCE SHEET TO ANSWER QUESTIONS 2
ID: 2821606 • Letter: U
Question
USE THE FOLLOWING INFORMATION TO CONSTRUCT A BALANCE SHEET
TO ANSWER QUESTIONS 28 through 30
Assume that the only accounts on the balance sheet are those listed below. Fill in this chart with the data provided and then answer questions 28, 29 and 30.
Cash ____________ Notes payable ____________
Accounts receivable ____________ Accounts payable ____________
Inventory ____________ Long - term debt ____________
Gross fixed assets ____________ Equity ____________
(Accumulated depreciation) ____________ Total liab & equity ____________
Net fixed assets ____________
Total assets ____________
28. Cash = ____________.
29. Long - term debt = ____________.
30. Total assets =____________.
$ 2,000,000 Sales Gross profit margirn Inventory turnover ratio (Cost of goods sold/Inventory) Net profit margin Average collection period Return on equity Accumulated depreciation Return on assets Accounts payable days Notes payable Gross fixed assets Percent of sales on credit (remainder are cash sales) 20% 25 4% 45 $ 75,000 12.5% 18 $ 18,000 $ 400,000 80% NOTE: Assume a 360 day year for all ratios, etc.Explanation / Answer
sales = $2,000,000
cogs = $16,00,000
gross profit = $4,00,000
now, inventory turnover = COGS/INVENTORY = 25
=16,000,000/INVENTORY = 25
INVENTORY = $64,000
NET PROFIT MARGIN:
NI/SALES = 4%
NET INCOME = $80,000
AVERAGE COLLECTION PERIOD = ACCOUNTS RECEIVABLE/ CREDIT SALES * 360 = 45
ACCOUNTS RECEIVABLE = $20,00,00
NET INCOME/ASSETS = 12.5%
TOTAL ASSETS = $640000.
SO, CURRENT ASSETS + NET FIXED ASSETS = TOTAL ASSEST
CURRENT ASSETS + (GROSS FIXED ASSETS - DEPRECIATION) = TOTAL ASSET
= CA + 325000 = 640000
CA = 315000
CASH + INVENTORY + ACCOUNTS RECEIVABLE = $315000
CASH + 64000 + 200000 = 315000
CASH = $51000
ACCOUNTS PAYABLE DAYS =18
SO, ACCOUNTS PAYABLE IS :
ACCOUNTS PAYABLE/ CREDIT SALES *360 = 45
ACCOUNTS PAYABLE = $2,00,000
RETURN ON EQUITY = 25%
NET INCOME/EQUITY = 25%
80,000 / EQUITY = 25%
EQUITY = 320000
ASSSETS = $64,0000
TOTAL LIABILITIES = $32,0000
NOW, LONG TERM DEBT =102000
CURRENT LIABILITIES + LONG TERM LIABILITIES = TOTAL LIABILITIES
OR, NOTES PAYABLE + ACCOUNTS PAYABLE + LONG TERM = TOTAL LAIBILITIES
= LONG TERM LIABILITIES = $1,02,000.
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