Question

Baggett Company's balance sheet accounts and amounts as of December 31, 2016, are shown in random order as follows:

Account	Debit (Credit)		Account	Debit (Credit)
Income Taxes Payable	$(3,800)		Additional Paid-in Capital on Preferred
Prepaid Items	1,800		Stock	$(7,900)
Additional Paid-in Capital on Common Stock	(9,300)		Allowance for Doubtful Accounts	(1,600)
Land	12,200		Bonds Payable (due 2020)	(23,000)
Notes Payable (due 2019)	(6,000)		Buildings	57,400
Notes Receivable (due 2018)	16,400		Sinking Fund to Retire Bonds Payable	5,000
Accounts Receivable	12,600		Advances from Customers (long-term)	(2,600)
Premium on Bonds Payable	(1,400)		Cash	4,300
Accounts Payable	(13,100)		Accumulated Depreciation: Equipment	(9,700)
Inventory	7,400		Retained Earnings	(18,300)
Accumulated Depreciation: Buildings	(21,000)		Preferred Stock, $100 par	(18,600)
Patents (net)	4,600		Wages Payable	(1,400)
Equipment	28,700		Common Stock, $10 par	(12,700)

Required:

1. Prepare a December 31, 2016 balance sheet for the Baggett.

Baggett Company
Balance Sheet
December 31, 2016
Assets
Current Assets:
		$
	$
			$
Long-Term Investments:
		$
Property, Plant, and Equipment:
		$
	$
	$
Intangible Assets:
Liabilities
Current Liabilities:
		$
			$
Long-Term Liabilities:
	$
		$
Other Liabilities:
Shareholders' Equity
Contributed Capital:
		$
			$
			$
			$

2. Compute the debt-to-assets ratio. Round to one decimal place. Do not enter a percent sign (%) as part of your answer.
%

Answer 1

Balance sheet

Assets
Current assets:
Cash		$4,300
Accounts receivable	$12,600
Less: Allowances for doubtful accounts	($1,600)	$11,000
Inventory		$7,400
Prepaid items		$1,800
Total current assets			$24,500
Long-term investments:
Notes receivable		$16,400
Sinking fund to retire bonds payable		$5,000
Total long-term investments			$21,400
Property, plant and equipment:
Land		$12,200
Buildings	$57,400
Less: Accumulated depreciation on building	($21,000)	$36,400
Equipment	$28,700
Less: Accumulated depreciation on equipment	($9,700)	$19,000
Total property, plant and equipment			$67,600
Intangible assets:
Patents		$4,600
Total intangible assets			$4,600
Total Assets			$118,100
Liabilities
Current liabilities:
Accounts payable		$13,100
Income tax payable		$3,800
Wages payable		$1,400
Total current liabilities			$18,300
Long-term liabilities:
Bonds payable (due 2020)		$23,000
Notes payable (due 2019)		$6,000
Advance from customers ( long-term)		$2,600
Total long-term liabilities			$31,600
Other liabilities:
Premium on bonds payable		$1,400
Total other liabilities			$1,400
Total liabilities			$51,300
Shareholders equity
Contributed capital:
Common stock		$12,700
Preferred stock		$18,600
Additional paid in capital- Common stock		$9,300
Additional paid in capital- Preferred stock		$7,900
Retained earnings		$18,300
Total shareholders equity			$66,800
Total Liabilities and shareholders equity			$118,100
Debt to equity=Total Liabilities/ Total assets
=$51,300/$118,100	=43.44%

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