Question

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 1.8 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25% Total liabilities-to-assets ratio: 50% Quick ratio: 0.80 Days' sales outstanding (based on 365-day year): 36.5 days Inventory turnover ratio: 3.50 Do not round intermediate calculations. Round your answers to the nearest whole dollar.

Partial Income	Statement Information
Sales	$
Cost of goods sold	$

Balance Sheet

Cash	$	Accounts payable	$
Accounts receivable		Long-term debt	50,000
Inventories		Common stock
Fixed assets		Retained earnings	100,000
Total assets	$  400,000	Total liabilities and equity	$

Answer 1

Sales = Total assets * total asset turnover = $400,000 * 1.8 = $720,000

cost of goods sold = Sales - (Sales * gross profit margin)
= $720,000 - ($720,000 * 25%)
= $720,000 - $180,000
= $540,000

Accounts payable = (Total assets * Total liabilities-to-assets ratio) - long term debt
= ($400,000 * 50%) - $50,000
= $200,000 - $50,000
= $150,000

Common stock = $400,000 - ($100,000 + $50,000 + $150,000)
= $400,000- $300,000
= $100,000

Inventory = Cost of goods sold / inventory turnover
= $540,000 / 3.50
= $154,286

Accounts receivable = (Total credit sales / 365) * days sales outstandings
= ($720,000 / 365) * 36.5
= $72,000

Cash = (Current liabilities * quick ratio) - accounts receivable
= ($150,000 * 0.80) - $72,000
= $48,000

Fixed assets = Total assets - (cash + accounts receivable + inventories)
= $400,000 - ($48,000 + $72,000 + $154,286)
= $400,000 - $274,286
= $125,714