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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, 2021 ($ in 000s) | |||||
Assets | |||||
Current assets: | |||||
Cash | $ | 1,250 | |||
Accounts receivable | 3,750 | ||||
Allowance for uncollectible accounts | (600 | ) | |||
Finished goods inventory | 7,000 | ||||
Prepaid expenses | 3,400 | ||||
Total current assets | 14,800 | ||||
Long-term assets: | |||||
Investments | 3,000 | ||||
Raw materials and work in process inventory | 3,900 | ||||
Equipment | 19,500 | ||||
Accumulated depreciationequipment | (9,000 | ) | |||
Franchise | ? | ||||
Total assets | $ | ? | |||
Liabilities and Shareholders Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 7,200 | |||
Notes payable | 8,000 | ||||
Interest payablenote | 400 | ||||
Deferred revenue | 2,400 | ||||
Total current liabilities | 18,000 | ||||
Long-term liabilities: | |||||
Bonds payable | 7,000 | ||||
Interest payablebonds | 200 | ||||
Shareholders equity: | |||||
Common stock | $ | ? | |||
Retained earnings | ? | ? | |||
Total liabilities and shareholders equity | ? | ||||
Additional information ($ in 000s):
- 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 1.5. That is, total liabilities are 150% of total shareholders equity. Retained earnings at the beginning of the year was $3,200. Net income for 2021 was $2,300, and $1,000 in cash dividends were declared and paid to shareholders.
- The investments represent treasury bills purchased in December 2021 that mature in January 2022. These are considered cash equivalents.
- Interest on both the notes and the bonds is payable annually.
- The notes payable account contains one note that is due in annual installments of $800 for each payment due.
- Deferred revenue will be recognized equally over the next 18 months.
- The common stock represents 500,000 shares of no par stock authorized, of which 300,000 shares are issued and outstanding.
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