Cheryl Wilson, president of Rivers Company, considers $42,000 to be a minimum cash balance for operating purposes. As can be seen from the following statements, only $37,000 in cash was available at the end of 2011. Because the company reported a large net income for the year, and also issued bonds and sold some long-term investments, the sharp decline in cash is puzzling to Ms. Feldman.

Cheryl Wilson, president of Rivers Company, considers $42,000 to be a minimur operating purposes. As can be seen from the following statements, only $37,000 in ca the end of 2011. Because the company reported a large net income for the year, anc and sold some long-term investments, the sharp decline in cash is puzzling to Ms. Feldr Rivers Company Comparative Balance Sheet December 31, 2011, and 2010 2011 2010 Assets Current assets Cash Accounts Receivable Inventory Prepaid expenses $ 37,000 S 59,400 238,600 209,200 41,400 226,400 269,800 22,400 Total current assets 555,600 548,600 Long-term investments 156,000 230,000 Plant and Less accumulated depreciation 904,000 221,000 772,000 196,600 equipment Net plant and equipment 683,000 575,400 Total assets $1,394,600 $1,354,000 Liabilities and Stockholders' equity Current liabilities Accounts payable Accrued liabilities Income taxes payable $ 194,800 10,200 59,600 254,200 19,400 50,000 Total current liabilities Bonds Payable 264,600 266,000 323,600 144,000 Total liabilities 530,600 467,600 Stockholders' equity: 650,000 214,000 710,000 176,400 Common stock Retained earnings Total stockholders' equity 864,000 886,400 Total liabilities and stockholders' equity $1,394,600 $1,354,000