The following is the balance sheet of McDonald Company:

Required

Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized.

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Inventory Current assets: Cash (including $10,000 restricted for payment of note) Marketable equity securities Accounts receivable, less allowance for doubtful accounts of $12,000 Total current assets Plant assets: Land Buildings, net Equipment Less: Accumulated depreciation Patent Organizational costs Other assets: Assets Prepaid insurance Total assets Current liabilities: Liabilities and Stockholders' Equity MCDONALD COMPANY December 31, 2012 Accounts payable Wages payable Notes payable, due July 1, 2014 Bonds payable, due December 2018 Total current liabilities Dividends payable Deferred tax liability, long term Stockholders' equity: Common stock ($10 par, 10,000 shares authorized, 5,000 shares outstanding) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $80,000 20,000 $ 40,000 20,000 70,000 60,000 $ 40,000 100,000 60,000 20,000 15,000 $ 60,000 10,000 20,000 100,000 $ 50,000 156,000 $190,000 235,000 5,000 $430,000 $190,000 4,000 30,000 206,000 $430,000