Nickel Industries Reported the Following Amounts on Its Balance Sheet

question 30

Essay

Nickel Industries reported the following amounts on its balance sheet on December 31,2014:
$$\begin{array} { | l | r } \hline \text { Cash } & \$ 180,000 \\\hline \text { Nates payable } & 100,000 \\\hline \text { Inventary } & 325,000 \\\hline \text { Cantributed Capital } & 750,000 \\\hline \text { Net Praperty, Plant a Equipment } & 600,000 \\\hline \text { Accaunts Receivable } & 30,000 \\\hline \text { Accuunts Payable } & 75,000 \\\hline \text { Retained Earrings } & ? \\\hline\end{array}$$
Required:
1.What is the amount of Nickel's total assets at the end of 2011?
2.Identify the items listed above that are liabilities.
3.What is the amount of Nickel's retained earnings at the end of 2011?
4.Prepare a balance sheet for Nickel Industries using U.S.GAAP as of December 31,2011.
5.Nickel Industries wishes to purchase merchandise from your company on account.The amount of the purchases would probably be about $11,000 per month,and the terms would require Nickel to make payment in full within 30 days.Would you recommend that your company grant credit to Nickel under these terms? Explain the reasoning for your response.

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Definitions:

Cash Flows

The aggregate sum of funds moving into and out of a company, particularly influencing its liquidity.

Current Assets

Items that are likely to be cashed in, sold off, or used up within one year or during the usual operating period of a company.

Indirect Method

An approach used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to calculate operating cash flow.

Operating Activities

Activities that constitute the primary or main activities of a business, including the production, sale, and delivery of its products and services.