As Controller for Sanderson, You Are Attempting to Reconstruct and Revise

question 17

Essay

As controller for Sanderson, you are attempting to reconstruct and revise the following balance sheet prepared by a staff accountant.
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 $4,300. Net income for 2009 was $2,500 and $800 in cash dividends were declared and paid to shareholders.
2. The investments represent treasury bills purchased in December that mature in January.
3. Interest on both the note and the bonds is payable annually.
4. The note payable is due in annual installments of $800 each.
5. Unearned revenue will be earned equally over the next eighteen 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.