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# Financial management: Balance sheet current assets

It is as follows: Construct the current assets section of the balance sheet from the following data. (Use cash as a plug figure after computing the other values.)

Yearly sales (credit................\$720,000
Inventory turnover..................6 times
Current liabilities....................\$105,000
Current ratio.............................2
Average collection period.........35 days
Current assets:
Cash...........................................\$
Accounts receivable....................
Inventory......................................
Total current assets....................

#### Solution Preview

Current ratio = Current assets / Current liabilities
2.0 = Current Assets / \$105,000
Current Assets = \$210,000

Average collection period = Accounts receivables / Yearly sales *365
35 = Accounts receivables / 720000*365
Accounts receivables = ...

#### Solution Summary

The solution constructs the current assets section of the balance sheet.

\$2.19