Question

# The balance sheet for Stud Clothiers is shown next. Sales for the year were \$3,490,000, with...

The balance sheet for Stud Clothiers is shown next. Sales for the year were \$3,490,000, with 75 percent of sales sold on credit.

 STUD CLOTHIERS Balance Sheet 20X1 Assets Liabilities and Equity Cash \$ 38,000 Accounts payable \$ 262,000 Accounts receivable 292,000 Accrued taxes 148,000 Inventory 248,000 Bonds payable (long-term) 178,000 Plant and equipment 500,000 Common stock 100,000 Paid-in capital 150,000 Retained earnings 240,000 Total assets \$ 1,078,000 Total liabilities and equity \$ 1,078,000

Compute the following ratios: (Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to-total assets answer as a percent rounded to 2 decimal places.)

CURRENT RATIO

QUICK RATIO

DEBT TO TOTAL ASSETS RATIO

ASSET TURNOVER

AVERAGE COLLECTION PERIOD

= ( \$ 38000 + \$ 292000 + \$ 248000 ) / ( \$ 262000 + \$ 148000)

= \$ 578000 / \$ 410000

= 1.40

• Current Assets = Cash + Accounts Receivables + Inventory = \$ 578000
• Current Liabilities = Accounts Payable + Accrued Taxes = \$ 410000

= ( \$ 578000 - \$ 248000 ) / \$ 410000

= \$ 330000 / \$ 410000

= 0.80

= \$ 178000 / ( \$ 578000 + \$ 500000 )

= \$ 178000 / \$ 1078000

= 0.17

• Debt = Bonds Payable long term = \$ 178000
• Total Assets = Current Liabilities + Fixed Assets ( Plant and Equipment) = \$ 1078000

= \$ 3490000 / \$ 1078000

= 3.24

= ( 360 * \$ 292000) / ( 75 % of \$ 3490000)

= 40.16 days

• Credit Sales is 75% of Sales

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