The chief financial officer (CFO) of Pharoah Company requested that the accounting department prepare a preliminary balance sheet on December 30, 2017, so that the CFO could get an idea of how the company stood. He knows that certain debt agreements with its creditors require the company to maintain a current ratio of at least 2:1. The preliminary balance sheet is as follows. Pharoah Company Balance Sheet December 30, 2017 Current assets Cash Accounts receivable Prepaid insurance $26,900 31,800 Equipment (net) Total assets Current liabilities 6,500 $65,200 201,400 $266,600 21,900 Accounts payable Salaries and wages payable 11,800 33,700 Long-term liabilities 81,500 115,200 Notes payable Total liabilities Stockholders' equity Common stock 100,000 Retained earnings 51,400 151,400 Total liabilities and stockholders' equity $266,600