Nickel Industries Reported the Following Amounts on Its Balance Sheet

Essay

Nickel Industries reported the following amounts on its balance sheet on December 31, 2011:
$\begin{array}{|l|l|}\hline \text { Cash } & \$ 180,000 \\\hline \text { Notes payable } & 100,000 \\\hline \text { Inventory } & 325,000 \\\hline \text { Contributed Capital } & 750,000 \\\hline \text { Net Property, Plant \& Equipment } & 600,000 \\\hline \text { Accounts Receivable } & 30,000 \\\hline \text { Accounts Payable } & 75,000 \\\hline \text { RetainedEarnings } & ? \\\hline &\end{array}$
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.