You Want to Prepare the Balance Sheet for Usher Inc

question 48

Essay

You want to prepare the balance sheet for Usher Inc. as of December 31, 2005. Use the following information. All information pertains to fiscal 2005 unless otherwise stated.• Retained earnings at December 31, 2004 is $234,000
• Sales (all credit sales) are $2.5 million
• Days to sell inventory is 20
• Cash on hand is 1% of sales
• All sales are paid 30 days after purchase
• Noncurrent assets are $1 million
• Long-term debt to equity ratio is 1
• All liabilities, other than long-term debt, are short-term liabilities
• 20,000 shares outstanding issued at $10 in 2004
• No dividends are paid
• Gross margin is 40%
• Net profit margin is 8%
• Assume there are 360 days in the year

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