Question
As controller for Henderson, you are attempting to reconstruct and revise the following balance sheet prepared by a staff accountant. HENDERSON MANUFACTURING COMPANY Balance Sheet
As controller for Henderson, you are attempting to reconstruct and revise the following balance sheet prepared by a staff accountant. |
HENDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2016 ($ in 000s) | |||||
Assets | |||||
Current assets: | |||||
Cash | $ | 1,200 | |||
Accounts receivable | 3,800 | ||||
Allowance for uncollectible accounts | (300 | ) | |||
Finished goods inventory | 5,200 | ||||
Prepaid expenses | 2,500 | ||||
Total current assets | 12,400 | ||||
Noncurrent assets: | |||||
Investments | 2,100 | ||||
Raw materials and work in process inventory | 3,000 | ||||
Equipment | 15,000 | ||||
Accumulated depreciationequipment | (8,100 | ) | |||
Franchise | ? | ||||
Total assets | $ | ? | |||
Liabilities and Shareholders Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 6,300 | |||
Note payable | 9,000 | ||||
Interest payablenote | 300 | ||||
Deferred revenue | 2,100 | ||||
Total current liabilities | 17,700 | ||||
Long-term liabilities: | |||||
Bonds payable | 8,000 | ||||
Interest payablebonds | 300 | ||||
Shareholders equity: | |||||
Common stock | $ | ? | |||
Retained earnings | ? | ? | |||
Total liabilities and shareholders equity | ? | ||||
Additional information ($ in 000s): |
1. | Certain records that included the account balances for the franchise and shareholders equity items were lost. However, a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.6. That is, total liabilities are 160% of total shareholders equity. Retained earnings at the beginning of the year was $4,400. Net income for 2016 was $2,600, and $900 in cash dividends were declared and paid to shareholders. |
2. | The investments represent treasury bills purchased in December 2016 that mature in January 2017. These are considered cash equivalents. |
3. | Interest on both the note and the bonds is payable annually. |
4. | The note payable is due in annual installments of $900 each. |
5. | Deferred revenue will be earned equally over the next 18 months. |
6. | The common stock represents 500,000 shares of no par stock authorized, 300,000 shares issued and outstanding. |
Required: |
Prepare a complete, corrected, classified balance sheet. |
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