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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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