1. The partially complete 2012 balance sheet and income statement for Challenge Industries are given below, followed

by selected ratio values for the firm based on its completed 2012 financial statements. Use the ratios along with the partial statements to complete the financial statements. Hint: Use the ratios in the order listed to calculate the missing statement values that need to be installed in the partial statements.

Current assets Cash

$ 52,000 60,000 200,000 Inventory ?

Marketable securities Accounts receivable

Challenge Industries, Inc. Balance Sheet

At December 31, 2012 (in $ thousands)

Assets

Liabilities and Equity

Current liabilities

Accounts payable $150,000 Notes payable ? Accruals 80,000

Total current liabilities ? Long-term debt 425,000 Total liabilities ? Shareholders equity

Preferred stock N/A Common stock (at par) 150,000 Paid-in capital in excess of par N/A Retained earnings 390,000

Total current assets

Fixed assets (gross)

Less: Accumulated depreciation

Net fixed assets

Total assets

Inventory __________________ Total current assets __________ Fixed assets (gross) __________ Total assets ________________ Notes payable ______________

?

? 240,000 ? ?

Total shareholders equity

Total liabilities and shareholders equity

?

?

Total current liabilities ______________ Total liabilities ____________________ Net fixed assets _____________

Total shareholders equity ____________ Total liabilities and SHE _____________