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 $ 1,600 Accounts receivable 4,200 Allowance for uncollectible accounts (700 ) Finished goods inventory 6,000 Prepaid expenses 2,900 Total current assets 14,000 Long-term assets: Investments 2,500 Raw materials and work in process inventory 3,400 Equipment 17,000 Accumulated depreciation—equipment (8,500 ) Franchise ? Total assets $ ? Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 6,700 Notes payable 13,000 Interest payable—note 300 Deferred revenue 3,000 Total current liabilities 23,000 Long-term liabilities: Bonds payable 12,000 Interest payable—bonds 700 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 1.7. That is, total liabilities are 170% of total shareholders’ equity. Retained earnings at the beginning of the year was $4,800. Net income for 2021 was $3,000, and $1,300 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 $1,300 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.)

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 $ 1,600 Accounts receivable 4,200 Allowance for uncollectible accounts (700 ) Finished goods inventory 6,000 Prepaid expenses 2,900 Total current assets 14,000 Long-term assets: Investments 2,500 Raw materials and work in process inventory 3,400 Equipment 17,000 Accumulated depreciation—equipment (8,500 ) Franchise ? Total assets $ ? Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 6,700 Notes payable 13,000 Interest payable—note 300 Deferred revenue 3,000 Total current liabilities 23,000 Long-term liabilities: Bonds payable 12,000 Interest payable—bonds 700 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 1.7. That is, total liabilities are 170% of total shareholders’ equity. Retained earnings at the beginning of the year was $4,800. Net income for 2021 was $3,000, and $1,300 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 $1,300 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 At December 31, 2021 ($ in 000s)
Assets
Current assets:
Cash			$	1,600
Accounts receivable				4,200
Allowance for uncollectible accounts				(700	)
Finished goods inventory				6,000
Prepaid expenses				2,900
Total current assets				14,000
Long-term assets:
Investments				2,500
Raw materials and work in process inventory				3,400
Equipment				17,000
Accumulated depreciation—equipment				(8,500	)
Franchise				?
Total assets			$	?
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable			$	6,700
Notes payable				13,000
Interest payable—note				300
Deferred revenue				3,000
Total current liabilities				23,000
Long-term liabilities:
Bonds payable				12,000
Interest payable—bonds				700
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 1.7. That is, total liabilities are 170% of total shareholders’ equity. Retained earnings at the beginning of the year was $4,800. Net income for 2021 was $3,000, and $1,300 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 $1,300 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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