"30. Construct the current assets section of the balance sheet from the following data. (Use cashas a plug figure after computing the other values.)Yearly sales (credit) ..................................................................... $720,000Inventory turnover ....................................................................... 6 timesCurrent liabilities ......................................................................... $105,000Current ratio ................................................................................. 2Average collection period ............................................................ 35 daysCurrent assets:Cash......................................................................... $______Accounts receivable ................................................ ______Inventory ................................................................. ______Total current assets .............................................. ______3-30. Solution:Inventory = $720,000/6 = $120,000Account rec. = ($720,000/360) × 35 = $70,000Current assets = 2 × $105,000 = $210,000Cash = $210,000? $120,000 ? $= $20,000Cash ................................$20,000Accounts receivable .......70,000Inventory ........................120,000Total current assets$210,000S3-45 31. The Griggs Corporation has credit sales of $1,200,000. Given the following ratios, fill inthe balance sheet below.Total assets turnover ................................... 2.4 timesCash to total assets ...................................... 2.0%Accounts receivable turnover ..................... 8.0 timesInventory turnover ...................................... 10.0 timesCurrent ratio ................................................ 2.0 timesDebt to total assets ...................................... 61.0%GRIGGS CORPORATIONBalance Sheet 2008Assets Liabilities and Stockholders ? Equity Cash .............................. _____ Current debt ............................................. _____Accounts receivable ...... _____ Long-term debt......................................... _____Inventory ....................... _____ Total debt ........................................... _____Total current assets _____ Equity ....................................................... _____Fixed assets.................. _____Total assets................... _____Total debt and stockholders ? equi___ ty __3-31. Solution:Griggs CorporationSales/total assets = 2.4 timesTotal assets = $1,200,000/2.4Total assets = $500,000Cash = 2% of total assetsCash = 2% × $500,000Cash = $10,000Sales/accounts receivable = 8 timesAccounts receivable = $1,200,000/8Accounts receivable = $150,000Sales/inventory = 10 timesInventory = $1,200,000/10Inventory = $120,000S3-46 3-31. (Continued)Fixed assets = Total assets? current assets Current asset = $10,000 + $150,000 + $120,000 = $280,000Fixed assets = $500,000? $280,000= $220,000Current assets/current debt = 2Current debt = Current assets/2Current debt = $280,000/2Current debt = $140,000Total debt/total assets = 61%Total debt = .61 × $500,000Total debt = $305,000Long-term debt = Total debt ? current debt Long-term debt = $305,000? 140,000 Long-term debt = $165,000Equity = Total assets? total debt Equity = $500,000 ? $305,000 Equity = $195,000Griggs CorporationBalance Sheet 2008Cash .....................$10,000 Current debt ..........$140,000A/R ......................150,000 Long-term debt .....165,000Inventory .............$120,000 Total debt ..........$305,000Total current assets 280,000Fixed assets .........220,000 Equity ...................195,000Total assets ..........$500,000 Total debt and $500,000stockholders ? equityS3-47 32. We are given the following information for the Coleman Machine Tools Corporation.Sales (credit) ....................................................................... $7,200,000Cash..................................................................................... 300,000Inventory ............................................................................. 2,150,000Current liabilities ................................................................ 1,400,000Asset turnover ..................................................................... 1.20 timesCurrent ratio ........................................................................ 2.50 timesDebt-to-assets ratio ............................................................. 40%Receivables turnover ........................................................... 8 timesCurrent assets are composed of cash, marketable securities, accounts receivable, andinventory. Calculate the following balance sheet items. a. Accounts receivable. b. Marketable securities. c. Fixed assets. d. Long-term debt.3-32. Solution:Coleman Machine Corporationa. Accounts receivable = Sales/Receivable turnover = $7,200,000/8x = $900,000b. Marketable securities = Current assets? (cash + accounts rec. + inventory)Current Assets = Current ratio × Current liabilities = 2.5 × $1,400,000 = $3,500,000Marketable securities = $3,500,000 ? ($300,000 + $900,000 + $2,150,000) = $3,500,000 ? $3,350,000= $150,000S3-48 3-32. (Continued)c. Fixed assets = Total assets ? Current assets Total assets = Sales/Asset turnover = $7,200,000/1.20x = $6,000,000Fixed assets = $6,000,000 ? $3,500,000= $2,500,000d. Long-term debt = Total debt? current liabilit Total debt = Debt to assets × total assets = 40% × $6,000,000 = $2,400,000Long-term debt = $2,400,000 ? $1,400,000= $1,000,000S3-49 "