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 | $ 1,600 | |
Accounts receivable | 4,300 | |
Allowance for uncollectible accounts | (500) | |
Finished goods inventory | 5,000 | |
Prepaid expenses | 2,400 | |
Total current assets | 12,800 | |
Noncurrent assets: | ||
Investments | 2,000 | |
Raw materials and work in process inventory | 3,200 | |
Equipment | 18,000 | |
Accumulated depreciationequipment | (8,000) | |
Franchise | ? | |
Total assets | $ ? | |
Liabilities and Shareholders Equity | ||
Current liabilities: | ||
Accounts payable | $6,200 | |
Note payable | 8,000 | |
Interest payablenote | 200 | |
Deferred revenue | 2,400 | |
Total current liabilities | 16,800 | |
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): 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 1.5. That is, total liabilities are 150% of total shareholders' equity. Retained earnings at the beginning of the year was $4,300. Net income for 2016 was $2,500, and $800 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 $800 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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