Your roommate has a small business he started in 2019. He asks you to help him put together both the Income Statement and the Balance sheet. He has given you the following information.

Sales Volume: 2500 units/year

Sales price per unit: $100/unit

Labor time to produce on unit: 40 minutes

Cost of Labor: $40/hour

Cost of Raw Material: $30/unit

Insurance: $500/month

Owners salary $50,000/year (cost to the company)

Rent: $3000/month

Tax rate 35%

Checking account balance on December 31, 2019: $2000

Raw material on hand: 500 units

His customers owe him $1000 for items purchased in 2019 He purchased office equipment and shelving for production for $20,000 in 2019 He bought several machines for a total cost $50,000 in 2019 He has a short-term loan from the bank for $2000

1. Create a Net Income Statement and a Balance Sheet for 2019.

2. From the Net Income Statement and Balance Sheet created in problem #1, what are the inventory turns per year? From the Balance Sheet created in problem #1 above, what is the current ratio?

3. For the company in problem 1 above, determine the Breakeven Sales price.