The partiallycomplete 2012 balance sheet and income statement for ChallengeIndustries are given below, followed by selected ratio values forthe firm based on its completed 2012 financial statements. Use theratios along with the partial statements to complete the financialstatements. Hint: Use theratios in the order listed to calculate the missing statementvalues that need to be installed in the partialstatements.

ChallengeIndustries, Inc.

BalanceSheet
At December 31, 2012
(in $ thousands)

Assets		Liabilitiesand Equity
Currentassets		Currentliabilities
Cash	$52,000	Accounts payable	$150,000
Marketable securities	60,000	Notes payable	?
Accounts receivable	200,000	Accruals	80,000
Inventory	?	Total currentliabilities	?
Total currentassets	?	Long-termdebt	425,000
Fixed assets(gross)	?	Totalliabilities	?
Less:Accumulated depreciation	240,000	Shareholders’equity
Net fixed assets	?	Preferred stock	N/A
Totalassets	?	Common stock (at par)	150,000
		Paid-in capital in excess of par	N/A
		Retained earnings	390,000
		Totalshareholders’ equity	?
		Totalliabilities and shareholders’ equity	?

Inventory __________________                                       

Total currentliabilities ______________

Total currentassets__________                                        

Totalliabilities ____________________

Fixed assets(gross)__________                                        

Net fixedassets_____________                                  

Total assets________________                                         

Totalshareholders’ equity ____________

Notes payable______________                                         

Totalliabilities and SHE _____________

ChallengeIndustries, Inc.

IncomeStatement
For the Year Ended December 31, 2012

(in $thousands)

Salesrevenue		$4,800,000
Less: Cost ofgoods sold		?
Grossprofits		?
Less operatingexpenses:
Sellingexpense	$1,010,000
General andadministrative expense	470,000
Depreciation	440,000
Total operating expenses		$1,920,000
Earningsbefore interest and taxes		?
Less: Interestexpense		35,000
Earningsbefore taxes		?
Less:Taxes		130,000
Net income(Net profits after taxes)		?
Less:Preferred dividends		15,000
Earningsavailable for common stockholders		?
Less:Dividends		60,000
To retainedearnings		?

ChallengeIndustries, Inc.

Ratios for theYear Ended December 31, 2012

Ratio	Value
Total assetturnover	2.00
Gross profitmargin	40%
Inventoryturnover	10
Currentratio	1.60
Net profitmargin	3.75%
Return oncommon equity	12.5%

Cost of Goods Sold__________                                        

Taxes____________________

Gross Profits_______________                                        

Net income_______________

EBIT_____________________                                        

Earn commonshareholders ____________

Earningsbefore taxes________                                         

To retainedearnings __________________