Problem S-8 Astro Languet established Flint Co. as a sole proprietorship on January 5, 2017, At the company's year end of December 31, 2017, the accounts had the following balances (in thousands): Current assets, exclud ng inventory Other assets Current liabilities Long-term bank loan wner's investment (excluding income) Purchases during year an. 2: 6,200 $11 une 30: 9,920 $12 Dec. 10: 7,110$16 $12 132 37 62 50 68.20 119.04 119.01 306,28 351.28 50.00 Sales Other expenses A count of ending inventory on December 31, 2017, showed there were 4,960 units on hand. Astro is now preparing financial statements for the year. He is aware that inventory may be costed using the FIFO or weighted average cost formula, He is unsure of which one to use and asks for your assistance, In discussions with Astro, you leam the following 1. Suppliers to F int provide goods at regular prices as long as Flint's current ratio s at least 2 to 1 If this ratio is ver, the suppliers increase their price by 10% n order to compensate for what they consider to be a substantial credit risk. 2. The terms of the long term bank loan include the bank's ability to demand immediate repayment of the loan if the debt to total assets ratio is greater than 45%. 3. Astro thinks that, tor the company to be a success, the rate of return on total assets should be at least 30%. 4. Astro has an agreement with the company's only employee that, for each full percentage point above a 25% rate of retum on total assets she will be given an addtional one day off with pay in the following year