Companies often use ratios as a basis for planning. The technique is to assume the business being planned will achieve targeted levels of certain ratios and then calculate the financial statement amounts that will result in those ratios. The process always starts with a dollar assumption about sales revenue. Forecast the balance sheet for Lambert Co. using the following projected information ($000). Round all projections to the nearest thousand dollars.

Sales ..........$10,000

Cash ..........$500

Accruals .......... $50

Gross margin ........45%

ACP .........42 days

Inventory turns .......7.0*

Total asset turnover ......1.25*

Current ratio .........2.0

Debt: equity ........1:3

ASSETS LIABILITIES Cash Accounts receivable Inventory Accounts payable Accruals Current liabilities Current assets Net fixed assets Total assets Debt Equity Total liabilities & equity