16 Requirement Complete the balance sheet and sales informat

16. Requirement: Complete the balance sheet and sales information in the table using the following financial data: 50% 2.4 Debt ratio: Quick ratio: Total assets turnover: Day\'s sales outstanding: Gross profit margin on sales: (Sales-Cost of goods sold)/Sales : 2096 Inventory turnover ratio: Current ratio: BALANCE SHEET Cash Accounts receivable Inventories Fixed assets Total assets 1.2 24 days 16 Accounts payable Long-term debt s 200,000 Common stock Retained earnings $ 100,000 Total liabilities and equity Cost of goods sold $500,000 Sales

Solution

Balance Sheet Cash $80,000 accounts Payable $50,000 Accounts Receivable $40,000 Long-term debt $200,000 Inventories $30,000 Common Stock $150,000 Fixed assets $350,000 Retained earnings $100,000 Total Assets $500,000 Total liabilities and equity $500,000 Sales $600,000 cost of goods sold $480,000 Debt ratio = Total liabilities/Total assets = 50% Total liabilities = 500000 x 50% = $250000 Total liabilities = Accounts payable + long term debt = $250000 So accounts payable = 250000-200000 = $50000 Common stock = $500000-100000-250000 = $150000 Total assets turnover = Sales / Total assets = 1.2 Sales = 500000 x 1.2 = $600000 Current ratio = Current assets/current liabilities = 3 Current assets = 3 x 50000 = $150000 Quick ratio = (Cash + AR)/Current liabilities = 2.4 Cash + AR = 50000 x 2.4 = $120000 Inventory = CA - (cash + AR) = 150000-120000 = 30000 Fixed assets = Total assets - Current assets Fixed assets = 500000-150000 = 350000 Inventory turnover = Cost of goods sold/Inventory = 16 Cost of goods sold = 16 x 30000 = $480000 Days sales outstanding = 360*AR/sales = 24 AR = 24 x 600000/360 = $40000 Cash + AR = 120000 Cash = 120000-40000 = 80000