Maurice Tutor
$15/per page/Negotiable
Presented below is the balance sheet of McDonald Company.
|
McDONALD COMPANY |
 |  |  |
|
December 31, 2000 |
 |  |  |
|
Assets |
 |  |  |
|
Current assets: |
 |  |  |
|
Cash (including $10,000 restricted |
 |  |  |
|
for payment of note) |
 |
$40,000 |
 |
|
Marketable equity securities |
 |
20,000 |
 |
|
Accounts receivable, less allowance |
 |  |  |
|
for doubtful accounts of $12,000 |
 |
70,000 |
 |
|
Inventory |
 |
60,000 |
 |
|
Total current assets |
 |  |  |
|
Plant assets: |
 |  |
$190,000 |
|
Land |
 |
40,000 |
 |
|
Buildings, net |
 |
100,000 |
 |
|
Equipment |
$80,000 |
 |  |
|
Less: Accumulated depreciation |
20,000 |
60,000 |
 |
|
Patent |
 |
20,000 |
 |
|
Organizational costs |
 |
15,000 |
 |
| Â | Â | Â |
235,000 |
|
Other assets: |
 |  |  |
|
Prepaid insurance |
 |  |
5,000 |
|
Total assets |
 |  |
$430,000 |
|
Liabilities and Stockholders’ Equity |
 |  |  |
|
Current liabilities: |
 |  |  |
|
Accounts payable |
 |
$60,000 |
 |
|
Wages payable |
 |
10,000 |
 |
|
Notes payable, due July 1, 2003 |
 |
20,000 |
 |
|
Bonds payable, due December 2010 |
 |
100,000 |
 |
|
Total current liabilities |
 |  |  |
|
Dividends payable |
 |  |  |
|
Deferred tax liability, long term |
 |  |  |
|
Stockholders’ equity: |
 |  |  |
|
Common stock ($10 par, 10,000 |
 |  |  |
|
shares authorized, 5,000 shares outstanding) |
50,000 |
 | |
|
Retained earnings |
 |
156,000 |
 |
|
Total stockholders’ equity |
 |  |
206,000 |
|
total liabilities and stockholders’ equity |
 |  |
$430,000 |
Required Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized.