You are given the following information for Zoe Unicorn Corporation. Sales (cred
ID: 1175186 • Letter: Y
Question
You are given the following information for Zoe Unicorn Corporation.
Sales (credit)............................................................ $3,549,000
Cash......................................................................... 179,000
Inventory.................................................................. 911,000
Current liabilities...................................................... 788,000
Asset turnover.......................................................... 1.40 times
Current ratio............................................................. 2.95 times
Debt-to-assets ratio.................................................. 40%
Receivables turnover................................................ 7 times
Current assets are composed of cash, marketable securities, accounts receivable, and inventory. Calculate the following balance sheet items. Show your work
a. Accounts receivable.
b. Marketable securities.
c. Fixed assets.
d. Long-term debt.
Explanation / Answer
a) Accounts receivable turnover = Credit Sales/Accounts receivables
7 = 3,549,000/Accounts receivable
Accounts receivable = 3,549,000/7 = $507,000
b) Marketable securities
Current ratio = Current assets/Current liabilities
2.95 = Current Assets/788,000
Current Assets = $2,324,600
Current Assets = Cash + Marketable securities + Accounts receivable + Inventory
2,324,600 = 179000 + Marketable securities + 507000 + 911000
Marketable securities = 727,600
c. Fixed Assets
Assets turnover = Sales/Total Assets
Total Assets = 3,549,000/1.40 = 2,535,000
Fixed Assets = Total Assets - Current Assets = 2,535,000 - 2,324,600 = 210,400
d) Long term debt
Debt-to-asset ratio = Long term debt/Total Assets
Long term debt = 40% * 2,535,000 = $1,014,000
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