Question

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
Assets 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.

c. Fixed assets.

Short answer

Fixed assets of the company are $210,400.

Step-by-step solution

Total assets

$\begin{array}{rcl}\mathrm{Total}\mathrm{assets}& =& \frac{\mathrm{Sales}}{\mathrm{Total}\mathrm{asset}\mathrm{turnover}\mathrm{ratio}}\\ & =& \frac{\$3,549,000}{1.40}\\ & =& \$2,535,000\end{array}$

Fixed assets

$\begin{array}{rcl}\mathrm{Fixed}\mathrm{assets}& =& \mathrm{Total}\mathrm{assets}-\mathrm{Current}\mathrm{assets}\\ & =& \$2,535,000-\$2,324,600\\ & =& \$210,400\end{array}$