Mary Walker, president of Rusco Company, considers $45,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $40,000 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: $ 63,000 242,500 211,000 45,000 561,500 245,000 775,000 222,500197,500 577,500 $1,384,000 Cash $40,000 255,000 272,500 24,500 592,000 165,000 910,000 Accounts Receivable Inventory Prepaid expenses Total current assets Long-term investments Plant and equipment Less accumulated depreciation Net plant and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: 687,500 $1,444,500 $ 180,000 10,500 62,000 252,500 275,000 527,500 $ 257,500 20,000 51,500 329,000 150,000 479,000 Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds Payable Total liabilities Stockholders' equity: 792,500 124,500 917,000 $1,444,500 725,000 180,000 905,000 $1,384,000 Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity