Corrected Balance Sheet
The following balance sheet was prepared by the accountant for Tippetts Company.
Tippetts Company |
|
Balance Sheet |
|
June 30, 2008 |
|
Assets |
|
Cash |
$ 32,200 |
Investment securities—Trading (includes long term investment of $250,000 in stock of |
|
Pine Valley Developers) |
298,000 |
Inventories (net of amount still due suppliers of $75,000) |
605,400 |
Prepaid expenses (includes a deposit of $15,000 made on inventories to be delivered |
|
in 18 months) |
48,000 |
Property, plant, and equipment (excluding $70,000 of equipment still in use, |
|
but fully depreciated) |
240,000 |
Goodwill (based on estimate by the president of Tippetts Company) |
90,000 |
Total assets |
$1,313,600 |
Liabilities and Owners’ Equity |
|
Notes payable ($70,000 due in 2010) |
$ 140,000 |
Accounts payable (not including amount due to suppliers of inventory—see above) |
135,000 |
Long term liability under pension plan |
55,000 |
Retained earnings restricted for building expansion |
115,000 |
Accumulated depreciation |
78,000 |
Taxes payable |
42,500 |
Bonds payable (net of discount of $20,000) |
280,000 |
Deferred income tax liability |
62,000 |
Common stock (20,000 shares, $1 par) |
20,000 |
Additional paid in capital |
237,500 |
Unrestricted retained earnings |
148,600 |
Total liabilities and owners’ equity |
$1,313,600 |
Instructions: Prepare a corrected classified balance sheet using appropriate account titles.