Problem:
Beth Nail discovered a piece of wet and partially burned balance sheet after her office was destroyed by fire. She could recall a current ratio of 1.75 and a debt to assets ratio of 45 percent
Assets
Current assets
Cash $ 36,000
Accounts receivable (A)
Inventory 63,000
Prepaid expenses 13,500
Total current assets (B)
Long-term assets
Building (C)
Less: Accumulated depreciation (45,000)
Total long-term assets 270,000
Total assets $ (D)
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable $ 63,000
Notes payable (E)
Income tax payable 27,000
Total current liabilities 120,000
Long-term liabilities
Bonds payable 67,500
Mortgage payable (F)
Total liabilities (G)
Stockholders' equity
Common stock 135,000
Retained earnings (H)
Total stockholders' equity (I)
Total liabilities and stockholders' equity $(J)
Determine the missing numbers in the illustrated balance sheet and prepare a completed balance sheet in accordance with generally accepted accounting principles.