• Home
  • Blog
  • SANDERSON MANUFACTURING COMPANY, accounting homework help

SANDERSON MANUFACTURING COMPANY, accounting homework help

0 comments

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.

SANDERSON MANUFACTURING COMPANY

Balance Sheet

At December 31, 2016

($ in 000s)

Assets

  Current assets:  

     Cash $1,550 

     Accounts receivable 4,100 

     Allowance for uncollectible accounts (700)

     Finished goods inventory 6,300 

     Prepaid expenses 1,500 

 

       Total current assets 12,750 

  Noncurrent assets:  

     Investments 3,300 

     Raw materials and work in process inventory 2,550 

     Equipment 18,000 

     Accumulated depreciation—equipment (4,500)

     Patent ? 

 

       Total assets $? 

 

Liabilities and Shareholders’ Equity

  Current liabilities:  

     Accounts payable $5,500 

     Note payable 4,600 

     Interest payable—note 400 

     Deferred revenue 3,600 

 

       Total current liabilities 14,100 

  Long-term liabilities:  

     Bonds payable 5,800 

     Interest payable—bonds 500 

  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 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 $4,600. Net income for 2016 was $1,600 and $800 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 note and the bonds is payable annually.

4. The note payable is due in annual installments of $1,150 each.

5. Deferred revenue will be earned equally over the next two fiscal years.

6.

The common stock represents 300,000 shares of no par stock authorized, 280,000 shares issued and outstanding.

  

Required:

Prepare a complete, corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

About the Author

Follow me


{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}