The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the company's controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet. $ 2,750 6,500 (1,900) 7,500 2,700 17,550 SANDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2021 ($ in 000s) Assets Current assets: Cash Accounts receivable Allowance for uncollectible accounts Finished goods inventory Prepaid expenses Total current assets Long-term assets: Investments Raw materials and work in process inventory Equipment Accumulated depreciation Patent (net) Total assets Liabilities and Shareholders' Equity Current liabilities: Accounts payable Notes payable Interest payable (on notes) Deferred revenue Total current liabilities Long-term liabilities: Bonds payable Interest pavable lon bonds) 4,500 3,750 24,000 (5,700) 2 $ ? $ 6,700 7,000 1,600 6,000 21,300 7,000 500 1,600 6,000 21,300 Interest payable (on notes) Deferred revenue Total current liabilities Long-term liabilities: Bonds payable Interest payable (on bonds) Shareholders' equity: Common stock Retained earnings Total liabilities and shareholders' equity 7,000 500 $ 2 2 Additional information ($ in 000s): 1. 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 1.2. That is, total liabilities are 120% of total shareholders' equity. Retained earnings at the beginning of the year was $7,000. Net income for 2021 was $2,300 and $300 in cash dividends were declared and paid to shareholders. 2. Management intends to sell the investments in the next six months. 3. Interest on both the notes and the bonds is payable annually. 4. The notes payable are due in annual installments of $1,750 each. 5. Deferred revenue will be recognized as revenue equally over the next two fiscal years. 6. The common stock represents 600,000 shares of no par stock authorized, 400,000 shares issued and outstanding. SANDERSON MANUFACTURING COMPANY Balance Sheet At December 31, 2021 ($ in 000s, except share data) Assets Current assets: Cash $ 2,750 $ 6,500 (1,900) Accounts receivable Allowance for uncollectible accounts Net accounts receivable Inventory: Finished goods 4,600 7,500 7,500 14,850 Total current assets Property, plant, and equipment: Equipment Accumulated depreciation Net property, plant, and equipment Intangible assets: 24,000 5,700 29,700 Intangible assets: Patent (net) 5,700 $ 50,250 Total assets Liabilities and Shareholders' Equity Current liabilities: Accounts payable Notes payable (current maturities of long-term debt) Deferred revenue $ 6,700 6,000 12,700 Total current liabilities Long-term liabilities: Notes payable (long-term) Bonds payable 7,000 7,000 19,700 Total long-term liabilities Total liabilities Shareholders' equity: Common stock Retained earnings