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, 2016 ($ in 000s)
Assets
Current assets:
Cash $ 1,500
Accounts receivable 4,100
Allowance for uncollectible accounts (600 )
Finished goods inventory 5,800
Prepaid expenses 2,800
Total current assets 13,600
Noncurrent assets:
Investments 2,400
Raw materials and work in process inventory 3,300
Equipment 16,500
Accumulated depreciationequipment (8,400 )
Franchise ?
Total assets $ ?
Liabilities and Shareholders Equity
Current liabilities:
Accounts payable $ 6,600
Note payable 12,000
Interest payablenote 400
Deferred revenue 3,000
Total current liabilities 22,000
Long-term liabilities:
Bonds payable 11,000
Interest payablebonds 600
Shareholders equity:
Common stock $ ?
Retained earnings ? ?
Total liabilities and shareholders equity ?

Additional information ($ in 000s):
1.

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 1.5. That is, total liabilities are 150% of total shareholders equity. Retained earnings at the beginning of the year was $4,700. Net income for 2016 was $2,900, and $1,200 in cash dividends were declared and paid to shareholders.

2.

The investments represent treasury bills purchased in December 2016 that mature in January 2017. These are considered cash equivalents.

3. Interest on both the note and the bonds is payable annually.
4. The note payable is due in annual installments of $1,200 each.
5. Deferred revenue will be earned equally over the next 18 months.
6.

The common stock represents 500,000 shares of no par stock authorized, 300,000 shares 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.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!