Astro Languet established Flint Products Co. as a sole proprietorship on January 5, 2020. At the companys year end of December 31, 2020, the accounts had the following balances (in thousands):

Current assets, excluding inventory		$12
Other assets		134
Current liabilities		37
Long-term bank loan		62
Owners investment (excluding income)		50
Purchases during year
Jan. 2: 6,200 @ $11		68.20
June 30: 9,920 @ $12		119.04
Dec. 10: 7,440 @ $16		119.04
		306.28
Sales		353.28
Other expenses		50.00

A count of ending inventory on December 31, 2020, showed there were 4,960 units on hand. Astro is now preparing financial statements for the year. He is aware that inventory may be costed using the FIFO or weighted average cost formula. He is unsure of which one to use and asks for your assistance. In discussions with Astro, you learn the following.

1.		Suppliers to Flint Products provide goods at regular prices as long as Flint Products current ratio is at least 2 to 1. If this ratio is lower, the suppliers increase their price by 10% in order to compensate for what they consider to be a substantial credit risk.
2.		The terms of the long-term bank loan include the banks ability to demand immediate repayment of the loan if the debt to total assets ratio is greater than 45%.
3.		Astro thinks that, for the company to be a success, the rate of return on total assets should be at least 30%.
4.		Astro has an agreement with the companys only employee that, for each full percentage point above a 25% rate of return on total assets, she will be given an additional one day off with pay in the following year.

Part 1

Prepare an income statement and a year-end SFP, assuming the company applies: (1) the FIFO cost formula and (2) the weighted average cost formula. (Enter amounts in thousands. List Current Assets in order of liquidity. Round weighted average cost and final answers to 2 decimal places, e.g. 52.75.)

Statement of income	FIFO				Weighted Average
Net income / (Loss)Other expensesCost of Goods SoldSalesGross Profit / (Loss)Ending InventoryPurchases			$				$
SalesGross Profit / (Loss)Net income / (Loss)Cost of Goods SoldEnding InventoryOther expensesPurchases
SalesCost of Goods SoldPurchasesGross Profit / (Loss)Net income / (Loss)Ending InventoryOther expenses	$				$
AddLess: Ending InventorySalesPurchasesGross Profit / (Loss)Cost of Goods SoldNet income / (Loss)Other expenses
SalesNet income / (Loss)Gross Profit / (Loss)Other expensesPurchasesEnding InventoryCost of Goods Sold
Gross Profit / (Loss)Other expensesSalesEnding InventoryNet income / (Loss)Cost of Goods SoldPurchases
PurchasesEnding InventoryGross Profit / (Loss)SalesNet income / (Loss)Other expensesCost of Goods Sold			$				$

SFP	FIFO		Weighted Average
InventoryTotal AssetsCurrent LiabilitiesLong-term Bank LoanCurrent Assets, Excluding InventoryTotal Liabilities and Owners' EquityOther AssetsTotal LiabilitiesTotal Current AssetsAstro Languet, Capital	$		$
Current LiabilitiesLong-term Bank LoanTotal AssetsTotal Current AssetsAstro Languet, CapitalInventoryTotal Liabilities and Owners' EquityOther AssetsCurrent Assets, Excluding InventoryTotal Liabilities
Total Current AssetsLong-term Bank LoanTotal AssetsCurrent Assets, Excluding InventoryTotal LiabilitiesTotal Liabilities and Owners' EquityAstro Languet, CapitalInventoryOther AssetsCurrent Liabilities
Total Liabilities and Owners' EquityInventoryTotal Current AssetsCurrent LiabilitiesAstro Languet, CapitalTotal AssetsLong-term Bank LoanOther AssetsTotal LiabilitiesCurrent Assets, Excluding Inventory
Current LiabilitiesTotal AssetsAstro Languet, CapitalTotal Liabilities and Owners' EquityTotal Current AssetsOther AssetsLong-term Bank LoanCurrent Assets, Excluding InventoryTotal LiabilitiesInventory	$		$
Total Current AssetsCurrent Assets, Excluding InventoryTotal Liabilities and Owners' EquityInventoryTotal AssetsTotal LiabilitiesOther AssetsAstro Languet, CapitalCurrent LiabilitiesLong-term Bank Loan	$		$
Total AssetsAstro Languet, CapitalCurrent Assets, Excluding InventoryTotal LiabilitiesTotal Liabilities and Owners' EquityCurrent LiabilitiesInventoryTotal Current AssetsLong-term Bank LoanOther Assets
InventoryTotal LiabilitiesTotal Current AssetsCurrent LiabilitiesTotal Liabilities and Owners' EquityTotal AssetsOther AssetsLong-term Bank LoanCurrent Assets, Excluding InventoryAstro Languet, Capital
Total Current AssetsCurrent Assets, Excluding InventoryInventoryTotal LiabilitiesAstro Languet, CapitalCurrent LiabilitiesTotal AssetsTotal Liabilities and Owners' EquityOther AssetsLong-term Bank Loan
Total Current AssetsLong-term Bank LoanCurrent Assets, Excluding InventoryTotal Liabilities and Owners' EquityTotal AssetsInventoryCurrent LiabilitiesOther AssetsAstro Languet, CapitalTotal Liabilities	$		$

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