Complete the following balance sheet for the Davenport Limited using the followi
ID: 2653602 • Letter: C
Question
Complete the following balance sheet for the Davenport Limited using the following information:
Debt to Assets = 55 percent
Quick Ratio = 1.2
Asset Turnover = 5x
Fixed Asset Turnover = 12.037x
Current Ratio = 2
Average Collection Period = 16.837 days
Cash
Current Liabilities
Receivables
Bonds Payable
Inventory
Total Liabilities
Total Current Assets
Net Worth
Plant and Equipment
Total Assets
372,000
Total Liabilities & Net Worth
Cash
Current Liabilities
Receivables
Bonds Payable
Inventory
Total Liabilities
Total Current Assets
Net Worth
Plant and Equipment
Total Assets
372,000
Total Liabilities & Net Worth
Explanation / Answer
- Asset turnover = Sales / Total Assets
Sales = 372,000 x 5 = $1,860,000
- Fixed Assets turnover = Sales / Fixed Assets
Fixed assets = 1,860,000 / 12.037 = $154,523.56
- Current Assets = Total Assets - Fixed Assets = 372,000 - 154.523.55 = $217,476.44
- Current Ratio = Current Assets / Current Liabilities
Current Liabilities = 217,476.44 / 2 = $108,738.22
- Quick Ratio = Quick Assets / Current Liabilities
Quick Assets = 1.2 x 108,738.22 = $130,485.86
- Quick assets = Current assets - Inventory
Inventory = 217,476.44 - 130,485.86 = $86,990.58
- Average Collection period = 365 x Receivables / Sales
Receivables = 16.837 x 1,860,000 / 365 = $85,800
- Cash = Quick assets - receivables = 130,485.86 - 85,800 = $44,685.86
- Bonds Payable = 372,000 x 55% = $204,600
- Net Worth = Total Assets - Current Liabilities - Bonds Payable = 372,000 - 108,738.22 - 204,600 = $58,661.78
Assets $ Liabilities $ Cash 44,685.86 Current Liabilities 108,738.22 Receivables 85,800.00 Bonds Payable 204,600.00 Inventory 86,990.58 Net Worth 58,661.78 Fixed Assets(Equipment) 154,523.56 - - Total Assets 372,000.00 Total Liabilities 372,000.00