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 | $ | 1,500 | |||
Accounts receivable | 4,100 | ||||
Allowance for uncollectible accounts | (600 | ) | |||
Finished goods inventory | 5,800 | ||||
Prepaid expenses | 2,800 | ||||
Total current assets | 13,600 | ||||
Noncurrent assets: | |||||
Investments | 2,400 | ||||
Raw materials and work in process inventory | 3,300 | ||||
Equipment | 16,500 | ||||
Accumulated depreciationequipment | (8,400 | ) | |||
Franchise | ? | ||||
Total assets | $ | ? | |||
Liabilities and Shareholders Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 6,600 | |||
Note payable | 12,000 | ||||
Interest payablenote | 400 | ||||
Deferred revenue | 3,000 | ||||
Total current liabilities | 22,000 | ||||
Long-term liabilities: | |||||
Bonds payable | 11,000 | ||||
Interest payablebonds | 600 | ||||
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 $4,700. Net income for 2016 was $2,900, and $1,200 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 $1,200 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. (Do not round your intermediate calculations. Enter your answers in the order of their liquidity. Amounts to be deducted should be indicated by a minus sign. Enter your answers in thousands of dollars.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started