Presented below is the balance sheet of Ingram Industries.

INGRAM INDUSTRIES Balance Sheet June 30, 2000 Assets Current assets:

Cash (including $13,000 in sinking fund for bonds payable) $ 70,000 Marketable securities 23,400 Investment in subsidiary company 23,000 Accounts receivable 21,000 Inventories (lower-of-cost-or-market) 117,000 $254,400 Plant assets:

Land and buildings $160,000 Less: Accumulated depreciation 100,000 60,000 Investments:

Treasury stock 4,000 Deferred charges:

Discount on bonds payable $ 6,000 Prepaid expenses 2,000 8,000

$326,400 Liabilities and Stockholders’ Equity Liabilities:
Notes payable to bank $60,000 Accounts payable 18,000 Bonds payable 61,000 Total liabilities $139,000 Stockholders’ equity:
Preferred and common (each $10 par, 5,000 shares preferred and 6,000 shares common) $110,000 Capital in excess of par 61,000 Retained earnings, beginning of year $ 11,400 Net income 15,000 Less: Dividends 10,000 16,400 187,400 Total liabilities and stockholders’ equity $326,400 Required Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized.