Question

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, 2018 ($ in 000s) Assets Current assets: Cash Accounts receivable Allowance for uncollectible accounts Finished goods inventory Prepaid expenses Total current assets Long-term assets: Investments Raw materials and work in process inventory Equipment Accumulated depreciation-equipment Patent $ 2,250 5,500 (1,400) 7,000 2,200 15,550 4,000 3,250 19,000 (5,200) $ ? Total assets Liabilities and shareholders' Equity Current liabilities: Accounts payable Note payable Interest payable-note Deferred revenue Total current liabilities Long-term liabilities: Bonds payable Interest payable-bonds Shareholders' equity: Common stock Retained earnings Total liabilities and shareholders' equity $ 6,200 6,000 1,100 5,000 18,300 6,500 400 $ ? ? ?

Answer 1

Answer:

SANDERSON MANUFACTURING COMPANY
Balance sheet
At December 31,2018
$ in 000's
ASSETS	$	$
Current assets;
Cash		2250
Accounts Receivable	5500
Less: Allowance for uncollectible accounts	(1400)	4100
Finished goods inventory		7000
Prepaid Expenses		2200
Investments		4000
Total current expenses ( A )		19550
Long -term assets;
Raw materials and work in process inventory		3250
Equipment	19000
Less: Accumulated depreciation-Equipment	(5200)	13800
Patent		9600
Total long-term assets ( B )		26650
TOTAL ASSETS ( A ) + ( B )		46200
Laibilities and Shareholder's Equity
Current Liabilities;
Accounts Payable		6200
Note Payable		1500
Deferred Revenue ( $ 5000 / 2)		2500
Total current liabilities (A )		10200
Long-term liabilities;
Note Payable ( $ 6000 + $ 1100- $ 1500)		5600
Bonds Payable		6500
Interest payable -Bonds		400
Deferred Revenue		2500
Total current liabilities ( B )		15000
Shareholder's equity;
Common Stock	13300
Retained Earnings	7700
Total shareholder's equity ( C )		21000
Total liabilities and shareholder's equity ( A + B + C )		46200

	Workings,	$ 000's
1	Retained Earnings
	Beginning balance	6000
	Add: Net income	2050
	Less: Cash Dividend	(350)
	Ending balance	7700
	Let common stock be 'X' . Then,
	Total liabilities = $ 18300 + $ 6500 + $ 400 = 120% of ( X + $ 7,700,000)
	1.2 X+ 8,910 = $ 25200
	X     = ($ 25200 - $ 9240 )/1.2
	Common stock X     = $ 13300
2	Total liabilities and shareholder's equity = Total assets = $ 18300 + $ 6500+ $ 400+ $ 13300+ $ 7700= $ 46200
3	Total current assets	15550
	Long term assets ( $ 4000+ $ 3250+ $ 19000- $ 5200)	21050
	Patent = $ 46200- ( $ 15550+ $ 21050) = $ 9600