Problem 3-11 Balance Sheet Analysis Complete the balance sheet and sales informa

Question

Problem 3-11
Balance Sheet Analysis

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data:

Total assets turnover: 1.6
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25%
Total liabilities-to-assets ratio: 55%
Quick ratio: 0.95
Days sales outstanding (based on 365-day year): 30.5 days
Inventory turnover ratio: 7.0

Round your answers to the nearest whole dollar.

Balance Sheet

Partial Income
Statement
Information Sales $   Cost of goods sold $   Balance Sheet Analysis Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 1.6 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25% Total liabilities-to-assets ratio: 55% Quick ratio: 0.95 Days sales outstanding (based on 365-day year): 30.5 days Inventory turnover ratio: 7.0 Round your answers to the nearest whole dollar.

Explanation / Answer

Total liabilities to total assets ratio=55%

Or Total liabilities=55%*400000

=$220000

Hence long term debt+Accounts payable=$220000

Or accounts payable=$220000-50000

=$170000

Common stock=Total liabilitiesand equity-long term debt-Accounts payable-Retained earnings

=$400000-50000-170000-100000

=$80000

Quick ratio=0.95

Or accounts receivable+cash/Accounts payable=0.95

or 53479+Cash/170000=0.95

Or cash=108021

Hence Fixed assets=total assets-accounts receivable-Cash-Inventory

=400000-53479-108021-68571

=169929

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