1. Certain records that included the account balances for the patent and shareholders' equity items were...
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1. Certain records that included the account balances for the patent and shareholders' equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.2. That is, total liabilities are 120% of total shareholders' equity. Retained earnings at the beginning of the year was $5,600. Net income for 2021 was $1,950 and $500 in cash dividends were declared and paid to shareholders. 2. Management intends to sell the investments in the next six months. 3. Interest on both the notes and the bonds is payable annually 4. The notes payable are due in annual installments of $1,400 each. 5. Deferred revenue will be recognized as revenue equally over the next two fiscal years. 6. The common stock represents 400,000 shares of no par stock authorized, 330,000 shares issued and outstanding. SANDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2021 ($ in 000s) Assets Current assets: $ 2,050 5,100 (1,200) 6,800 2,000 14,750 Cash Accounts receivable Allowance for uncollectible accounts Finished goods inventory Prepaid expenses Total current assets Long-term assets: 3,800 3,050 23,000 (5,000) Investments Raw materials and work in process inventory Equipment Accumulated depreciation Patent (net) Total assets 2$ Liabilities and Shareholders' Equity Current liabilities: Accounts payable Notes payable Interest payable (on notes) Deferred revenue $ 6,000 5,600 900 4,600 17,100 Total current liabilities Long-term liabilities: Bonds payable Interest payable (on bonds) Shareholders' equity: 6,300 300 Common stock $ ? Retained earnings Total liabilities and shareholders' equity 1. Certain records that included the account balances for the patent and shareholders' equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.2. That is, total liabilities are 120% of total shareholders' equity. Retained earnings at the beginning of the year was $5,600. Net income for 2021 was $1,950 and $500 in cash dividends were declared and paid to shareholders. 2. Management intends to sell the investments in the next six months. 3. Interest on both the notes and the bonds is payable annually 4. The notes payable are due in annual installments of $1,400 each. 5. Deferred revenue will be recognized as revenue equally over the next two fiscal years. 6. The common stock represents 400,000 shares of no par stock authorized, 330,000 shares issued and outstanding. SANDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2021 ($ in 000s) Assets Current assets: $ 2,050 5,100 (1,200) 6,800 2,000 14,750 Cash Accounts receivable Allowance for uncollectible accounts Finished goods inventory Prepaid expenses Total current assets Long-term assets: 3,800 3,050 23,000 (5,000) Investments Raw materials and work in process inventory Equipment Accumulated depreciation Patent (net) Total assets 2$ Liabilities and Shareholders' Equity Current liabilities: Accounts payable Notes payable Interest payable (on notes) Deferred revenue $ 6,000 5,600 900 4,600 17,100 Total current liabilities Long-term liabilities: Bonds payable Interest payable (on bonds) Shareholders' equity: 6,300 300 Common stock $ ? Retained earnings Total liabilities and shareholders' equity
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Sanderson Manufacturing Company Balance sheet At December 31 2018 Current assets Cash 2050 Short ter... View the full answer
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