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Sharon Feldman, president of Allied Company, considers $31,000 to be a minimum cash balance for operating purposes. As can be seen from the following statements,
Sharon Feldman, president of Allied Company, considers $31,000 to be a minimum cash balance for operating purposes. As can be seen from the following statements, only $26,000 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. |
Allied Company Comparative Balance Sheet December 31, 2011, and 2010 | ||||||
2011 | 2010 | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 26,000 | $ | 46,200 | ||
Accounts Receivable | 213,200 | 224,300 | ||||
Inventory | 259,900 | 202,600 | ||||
Prepaid expenses | 14,700 | 28,200 | ||||
Total current assets | 513,800 | 501,300 | ||||
Long-term investments | 123,000 | 175,000 | ||||
Plant and equipment | 882,000 | 761,000 | ||||
Less accumulated depreciation | 215,500 | 193,300 | ||||
Net plant and equipment | 666,500 | 567,700 | ||||
Total assets | $ | 1,303,300 | $ | 1,244,000 | ||
Liabilities and Stockholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 184,900 | $ | 242,100 | ||
Accrued liabilities | 9,100 | 17,200 | ||||
Income taxes payable | 50,800 | 44,500 | ||||
Total current liabilities | 244,800 | 303,800 | ||||
Bonds Payable | 233,000 | 122,000 | ||||
Total liabilities | 477,800 | 425,800 | ||||
Stockholders |
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