We are given the following information for the Pettit Corporation — Asset turnover times — Current ratio — Receivables — assets composed cash marketable securities accounts

We are given the following information for the Pettit Corporation.

Sales (credit) $3,549,000

Cash 179,000

Inventory 911,000

Current liabilities 788,000

Asset turnover 1.40 times

Current ratio 2.95 times

Debt-to-assets ratio 40%

Receivables turnover 7 times

Current assets are composed of cash, marketable securities, accounts receivable, and inventory. Calculate the following balance sheet items.

a. Accounts receivable.

b. Marketable securities.

c. Fixed assets.

d. Long-term debt.

SOLUTION

a. Accounts receivable = Sales/Receivable turnover

= $3,549,000/7x

= $507,000

b. Marketable securities = Current assets – (Cash +