The chief financial officer (CFO) of Pharoah Company requested that the accounting department prepare a preliminary balance sheet on December 30, 2022, 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, 2022 Current assets Cash $27,000 Accounts receivable 41,380 Prepaid insurance 6,200 $ 74,580 Equipment (net) 201,300 Total assets $275,880 Current liabilities Accounts payable $ 22,600 Salaries and wages payable 11,300 $ 33,900 Long-term liabilities Notes payable 90,680 Total liabilities 124,580 Stockholders equity Common stock 100,000 Retained earnings 51,300 151,300 Total liabilities and stockholders equity $275,880