(Pro

forma balance sheet

construction)

Use the following industry-average ratios to construct a pro forma balance sheet for Karen's Beauty Products, Inc.:

Total asset turnover	1.5 times
Average collection period (assume 365-day year)	16 days
Fixed asset turnover	6 times
Inventory turnover (based on cost of goods sold)	2 times
Current ratio	1.9 times
Sales (all on credit)	$5,000,000
Cost of goods sold	70% of sales
Debt ratio	40%

.

Fill in the assets section of the pro forma balance sheet.(Round all items to the nearest dollar.)

Cash
Accounts receivable
Inventories
Net fixed assets
Total assets

Fill in the liabilities and common equity section of the pro forma balance sheet.(Round all items to the nearest dollar.)

Current liabilities
Long-term debt
Total liabilities
Common equity
Total liabilities and common equity