Mary Walker, president of Rusco Company, considers $14,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $8,000 in cash was available at the end of this year. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker. Rusco Company Comparative Balance Sheet at July 31 This Year Last Year Assets Current assets: Cash and cash equivalents $ 8,000 $21,000 Accounts receivable 120,000 80,000 Inventory Prepaid expenses Total current assets Long-term investments 5,000 140,000 90,000 9,000 273,000 200,000 50,000 70,000 Plant and equipment 430,000 300,000 Less accumulated depreciation 60,000 50,000 Net plant and equipment 370,000 250,000 Total assets $693,000 $520,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $123,000 $ 60,000 Accrued liabilities 8,000 17,000 Income taxes payable 20,000 12,000 Total current liabilities 151,000 89,000 Bonds payable 70,000 Total liabilities 221,000 89,000 Stockholders' equity: Common stock 366,000 346,000 Retained earnings 106,000 85,000 Total stockholders' equity 472,000 431,000