You are given the balance sheet and sales information for Hoffimeister Industrie

Question

You are given the balance sheet and sales information for Hoffimeister Industries: Accounts payable Long-term debt Common stock Cash Accounts receivable Inventories Fixed assets Total assets Sales 120,000 Retained earnings195,000 Cost of Goods Sold (COGS) S600,000 Total liabilities and equity Debt ratio: 50% Quick ratio: 0.80 Total assets turnover: 1.5 DSO (Days sales outstanding): 36.5 (based on 365 days) Gross profit margin on sales (Sales-COGS)Sales-25% Inventory turnover ratio: 5.0 Total doht

Explanation / Answer

Workings

Answers

Q1) Cash + Accounts receivables = 1,44,000

Q2) Fixed Assets = 2,76,000

Q3) C.O.G.S = 6,75,000

if any clarifications required please ask me

Total Liabilities / Total Assets = 0.5 Total Liabilities = 0.5*600000 = 300000 Accounts Payable = Total Liabilities - Long term Debt                                     = 300000-120000 = 180000 Quick Ratio = (Cash + Accounts receivables)/Accounts Payable = 0.8 Cash + accounts receivable = 0.8*180000 = 144000 Turnover / Total Assets = 1.5 Turn over = 1.5*600000 = 900000 Cost of Goods sold = 900000*75% = 675000 Net credit Sales/ Accounts receivable = 10 Accounts Receivables= 900000/10 = 90000 Cash = 144000-90000 = 54000 Inventory turnover ratio = sales / Inventory Inventory = 900000/5 = 180000 Fixed Assets = total assets - current assets                           = 600000-54000-180000-90000                           = 276000 Common Stock = Total Assets - Long term debt - Accounts Payable - Retaing Earnings                                 = 600000-120000-180000-195000                                 = 105000

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