nces M Mary Walker, president of Rusco Company, considers $44,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $39,000 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. Assets Current assets: Rusco Company Comparative Balance Sheet at July 31 This Year Last Year Cash 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: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds Payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Sales Cost of goods sold Rusco Company Income Statement For This Year Ended July 31 Gross margin Selling and administrative expenses Net operating incone Nonoperating items Gain on sale of investments Loss on sale of equipment $ 39,000 $ 61,800 253,600 241,200 271,600 210,400 23,800 43,800 588,000 557,200 162,000 240,000 908,000 774,000 222,000 197,200 686,000 576,800 $1,436,000 $1,374,000 $ 256,400 $ 179,000 10,400 19,000 61,200 $1,000 328.000 250,600 272,000 148,000 600,000 398,600 785,000 720,000 51,000 255,400 836,000 975, 400 $1,436,000 $1,374,000 $1,280,000 800,000 480,000 342,400 137,600 $ 32,000 (10,800) 21,200 10 of 10 Next