P4.4 A fire occurred in a friend’s restaurant overnight on December 31, 0005, and the friend has asked for your help. Although many accounting records were lost, some were recovered. With the recovered records and information obtained from outside sources, you believe a balance sheet can be reconstructed for the period ending on the date of the fire. Your friend provided the following information:

The forecasted current ratio as of December 31, 0005, was 1.25 to 1.

Balance sheets for the previous three years indicated that current assets on average represented 25 percent of total assets.

The bank reported the year-end bank balance was $763. It was estimated that $1,000 in the restaurant’s safe was destroyed during the fire.