A A A Accounts Receivabil Food Inventory Total Current Assets Accounts Payable Accrued Expenses Total Current...

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A A A Accounts Receivabil Food Inventory Total Current Assets Accounts Payable Accrued Expenses Total Current Liabilities A $

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Answer 1

Answer #1


Ques. No.	Current assets
	Cash	$100,000
2	Food inventory	$12,500	COGS of food = $ 150,000
			Food inventory turnover = 12 times
			Inventory turnover ratio = COGS/average inventory
			average inventory = 150,000/12
			Average inventory = $ 12,500

1	Account receivable	$109,589	Average collection period = Account receivable/(Net sales/365)
			20 = Account receivable/ (2,000,000/365)
			Account receivable = 2,000,000/365*20
			Account receivable = $ 109,589

3	Total current assets	$222,089
	Current ratio = 1.4
	Current assets/Current liabilitiy = 1.4
	Current liabilities = 222,089/1.4
	Current liabilities = $ 158,635

	Total assets = PPE + Current assets	$2,222,089
	Total liabilities and equity	$2,222,089
	Let total debt	x
	total equity	2,222,089- x


4	Solvency ratio = 2.5
	Solvency ratio = Total debt/Total equity
	2.5 = Total debt/Total equity
	2.5 = x/(2,222,089-x)
	5555222.5-2.5x = x
	3.5x = 5,555,222.5
	x = 5,555,222.5/3.5
	x = 1,587,206 = total Debt

5	Total equity = 2,222,089-1,587,206
	Total equity = 634883

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