Question: As controller for Henderson, you are attempting to reconstruct and revise the following balance sheet prepared by a staff accountant. Henderson Manufacturing Company Balance Sheet
As controller for Henderson, you are attempting to reconstruct and revise the following balance sheet prepared by a staff accountant.
| Henderson Manufacturing Company Balance Sheet At December 31, 2021 ($ in 000s) | |||||
| Assets | |||||
| Current assets: | |||||
| Cash | $ | 1,450 | |||
| Accounts receivable | 3,950 | ||||
| Allowance for uncollectible accounts | (800 | ) | |||
| Finished goods inventory | 5,300 | ||||
| Prepaid expenses | 3,600 | ||||
| Total current assets | 13,500 | ||||
| Long-term assets: | |||||
| Investments | 3,200 | ||||
| Raw materials and work in process inventory | 4,100 | ||||
| Equipment | 20,500 | ||||
| Accumulated depreciationequipment | (9,200 | ) | |||
| Franchise | ? | ||||
| Total assets | $ | ? | |||
| Liabilities and Shareholders Equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 7,400 | |||
| Notes payable | 10,000 | ||||
| Interest payablenote | 200 | ||||
| Deferred revenue | 3,600 | ||||
| Total current liabilities | 21,200 | ||||
| Long-term liabilities: | |||||
| Bonds payable | 9,000 | ||||
| Interest payablebonds | 600 | ||||
| Shareholders equity: | |||||
| Common stock | $ | ? | |||
| Retained earnings | ? | ? | |||
| Total liabilities and shareholders equity | ? | ||||
Additional information ($ in 000s):
- Certain records that included the account balances for the franchise and shareholders equity items were lost. However, a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.4. That is, total liabilities are 140% of total shareholders equity. Retained earnings at the beginning of the year was $3,400. Net income for 2021 was $2,500, and $1,200 in cash dividends were declared and paid to shareholders.
- The investments represent treasury bills purchased in December 2021 that mature in January 2022. These are considered cash equivalents.
- Interest on both the notes and the bonds is payable annually.
- The notes payable account contains one note that is due in annual installments of $1,000 for each payment due.
- Deferred revenue will be recognized equally over the next 18 months.
- The common stock represents 500,000 shares of no par stock authorized, of which 300,000 shares are issued and outstanding.
Required: Prepare a complete, corrected, classified balance sheet. (Do not round your intermediate calculations. Enter your answers in the order of their liquidity. Amounts to be deducted should be indicated by a minus sign. Enter your answers in thousands of dollars.)
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