Problem Walk-ThroughProblem Walk-ThroughProblem Walk-Through Balance Sheet Analy
ID: 2726802 • Letter: P
Question
Problem Walk-ThroughProblem Walk-ThroughProblem Walk-Through Balance Sheet Analysis Complete the balance sheet and sales information using the following financial data: Total assets turnover 1.3x Days sales outstanding: 37 days3 Inventor)' turnover ratio: 6x Fixed assets turnover: 3x Current ratio: 2.4x Gross profit margin on sales: (Sales - Cost of goods sold Sales 20*middot aCalculation is based on a 365-day year. Round your answer to the nearest cent Data for Barry Computer Co. and its industry averages follow.Explanation / Answer
Total assets turnover = Turnover / total asset
Total assets turnover = 1.3x
Turnover/ total assets = 1.3x
Turnover =1.3 * 225000 = 292500
Inventory turnover = Turnover / average inventory
Inventory turnover ratio = 6x
Turnover / average inventory = 6X
Inventory = Turnover/6X
= 292500/6X
= 48750
Fixed asset turnover = Turnover / fixed asset
Fixed assets turnover = 3X
Turnover / fixed asset= 3x
Fixed asset = Turnover/3x
= 292500/3
= 97500
Days sales outstanding = 37 days
Days sales outstanding = 365 * Account receivable / Turnover
365 * Account receivable / Turnover = 37 days
365 * AR /292500 = 37 days
AR = 29650
Cash = Total assets – Account receivable – inventories – fixed assets
= 225000 – 29650 – 48750 – 97500
Cash = 49100
Current assets = cash + AR + inventories
= 49100+ 29650+ 48750
=127500
Current ratio = current assets/current liabilities
Current ratio = 2.4 x
127500/current liabilities = 2.4
Current liabilities = 53125
Total assets = total liabilities and equity = 225000
Common stock = Total liabilities and equity – current liabilities – long term debt – retained earnings
= 225000 – 53125 – 33750 – 56250
=131875
GP = (Sales – Cost of goods sold)/Sales = 20%
(292500 –COGS)/292500 = 20%
COGS = 234000
Balancesheet Cash 49100 Current liabilities 53125 AR 29650 Long term debt 33750 Inventories 48750 common stock 81875 Fixed assets 97500 Retained earnings 56250 Total Assets 225000 Total liabilities and equity 225000 Sales 292500 Cost of goods sold 234000Related Questions
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