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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