The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the companys controller As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet SANDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2021 ($ in 000s) Assets Current assets Cash $ 2,450 Accounts receivable 5,900 Allowance for uncollectible accounts (1,600 ) Finished goods inventory 7,200 Prepaid expenses 2,400 Total current assets 16,350 Long term assets Investments 4,200 Raw materials and work in process inventory 3,450 Equipment 24,000 Accumulated depreciation (5,400 ) Patent (net) Total assets $ Liabilities and Shareholders Equity Current liabilities Accounts payable $ 6,400 Notes payable 6,400 Interest payable (on notes) 1,300 Deferred revenue 5,400 Total current liabilities 19,500 Long term liabilities Bonds payable 6,700 Interest payable (on bonds) 200 Shareholders equity Common stock $ Retained earnings Total liabilities and shareholders equity Additional information ($ in 000s) Certain records that included the account balances for the patent and shareholders equity items were lost However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1 1 That is, total liabilities are 110 of total shareholders equity Retained earnings at the beginning of the year was $6,400 Net income for 2021 was $2,150 and $450 in cash dividends were declared and paid to shareholders Management intends to sell the investments in the next six months Interest on both the notes and the bonds is payable annually The notes payable are due in annual installments of $1,600 each Deferred revenue will be recognized as revenue equally over the next two fiscal years The common stock represents 600,000 shares of no par stock authorized, 370,000 shares issued and outstanding Required Prepare a complete, corrected, classified balance sheet (Amounts to be deducted should be indicated by a minus sign )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 18, 2024

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the companys controller. As accounting manager for Sanderson, you are attempting to

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the companys controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet.

SANDERSON MANUFACTURING COMPANY
Balance Sheet
At December 31, 2021
($ in 000s)
Assets
Current assets:
Cash			$	2,450
Accounts receivable				5,900
Allowance for uncollectible accounts				(1,600	)
Finished goods inventory				7,200
Prepaid expenses				2,400
Total current assets				16,350
Long-term assets:
Investments				4,200
Raw materials and work in process inventory				3,450
Equipment				24,000
Accumulated depreciation				(5,400	)
Patent (net)				?
Total assets			$	?
Liabilities and Shareholders Equity
Current liabilities:
Accounts payable			$	6,400
Notes payable				6,400
Interest payable (on notes)				1,300
Deferred revenue				5,400
Total current liabilities				19,500
Long-term liabilities:
Bonds payable				6,700
Interest payable (on bonds)				200
Shareholders equity:
Common stock	$	?
Retained earnings		?		?
Total liabilities and shareholders equity				?

Additional information ($ in 000s):

Certain records that included the account balances for the patent and shareholders equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.1. That is, total liabilities are 110% of total shareholders equity. Retained earnings at the beginning of the year was $6,400. Net income for 2021 was $2,150 and $450 in cash dividends were declared and paid to shareholders.
Management intends to sell the investments in the next six months.
Interest on both the notes and the bonds is payable annually.
The notes payable are due in annual installments of $1,600 each.
Deferred revenue will be recognized as revenue equally over the next two fiscal years.
The common stock represents 600,000 shares of no par stock authorized, 370,000 shares issued and outstanding.

Required: Prepare a complete, corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)