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3 years ago

We are given the following information for the Pettit Corporation.

Business

1 answer:

lilavasa [31]3 years ago

3 0

Answer:

See below

Explanation:

a. Accounts receivables

= Sales / Receivables turnover

= $3,549,000 / 7x

= $507,000

b. Marketable securities

= Current assets - (Cash + Accounts receivable + Inventory)

Where;

Current asset = Current ratio × Current liabilities

Current asset = 2.95 × $788,000

Current asset = $2,348,240

Hence,

Marketable securities

= $2,348,240 - ($179,000 + $507,000 + $911,000)

= $2,348,240 - $1,597,000

= $751,240

c. Fixed assets

Total assets = Current assets + Fixed assets

$2,535,000 = $2,348,240 + Fixed assets

Fixed assets = $2,535,000 - $2,348,240

Fixed assets = $186,760

d. Long term debt

= Total debt - Current liabilities

Where,

Total debt = Debt to assets × Total assets

= 40% × ($3,549,000 / 1.40)

= 40% × $2,535,000

= $1,014,000

Hence,

Long term debt

= $1,014,000 - $788,000

= $226,000

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