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

question 44

Essay

As controller for Henderson, 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 2018 was $2,500, and $800 in cash dividends were declared and paid to shareholders.
2. The investments represent treasury bills purchased in December 2018 that mature in January 2019. 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 $800 each.
5. Deferred revenue will be recognized 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.

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Definitions:

Nucleotide Bases

The building blocks of DNA and RNA, consisting of adenine, thymine (uracil in RNA), cytosine, and guanine.

Obligate Symbionts

Organisms that require a symbiotic relationship with another organism to survive.

Pseudogenes

Sequences of DNA that resemble genes but are non-functional due to mutations, deletions, or insertions.

Interstrain Recombination

Genetic recombination that occurs between different strains of microorganisms, leading to genetic variability.