Question

You are given the following information for Zoe Unicorn Corporation. Sales (credit)............................................................          $3,549,000 Cash.............................................

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.
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Homework Answers

Answer #1

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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