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USE THE FOLLOWING INFORMATION TO CONSTRUCT A BALANCE SHEET TO ANSWER QUESTIONS Sales $ 2,000,000 Gross profit margin 20% Inventory turnover ratio (Cost of goods

USE THE FOLLOWING INFORMATION TO CONSTRUCT A BALANCE SHEET TO ANSWER QUESTIONS

Sales

$ 2,000,000

Gross profit margin

20%

Inventory turnover ratio (Cost of goods sold/Inventory)

25

Net profit margin

4%

Average collection period

45

Return on equity

25%

Accumulated depreciation

$ 75,000

Return on assets

12.5%

Accounts payable days

18

Notes payable

$ 18,000

Gross fixed assets

$ 400,000

Percent of sales on credit (remainder are cash sales)

80%

NOTE: Assume a 360 day year for all ratios, etc.

Assume that the only accounts on the balance sheet are those listed below. Fill in this chart with the data provided and then answer questions 28, 29 and 30.

Cash:_______ Notes Payable:_______

Accounts Receivable:_______ Accounts Payable:_______

Inventory:_______ Long-term debt:_______

Gross fixed assets:_______Equity_______

(Accumulated depreciation):_______ Total liab & equity:_______

Net fixed assets: _______

Total assets: _______

1. Cash= _______

2. Long-term debt=_______

3. Total assets=_______

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