Corrected Balance Sheet
The bookkeeper for Reliable Computers, Inc., reports the following balance sheet amounts as of June 30, 2008.
|
Current assets |
$233,400 |
|
Other assets |
667,100 |
|
Current liabilities |
146,820 |
|
Other liabilities |
100,000 |
|
Owners’ equity |
653,680 |
A review of account balances reveals the following data.
(a) An analysis of current assets discloses the following:
|
Cash |
$ 47,500 |
|
Investment securities—trading |
55,000 |
|
Accounts receivable |
51,900 |
|
Inventories, including advertising supplies of $2,000 |
79,000 |
|
|
$233,400 |
(b) Other assets include the following:
|
Property, plant, and equipment: |
|
|
Depreciated book value (cost, $670,000) |
$574,000 |
|
Deposit with a supplier for merchandise ordered for August delivery |
5,200 |
|
Goodwill recorded on the books to cancel losses incurred by the company in prior years |
87900 |
|
$667,100 |
(c) Current liabilities include the following:
|
Payroll payable |
$ 8,250 |
|
|
Taxes payable |
4,670 |
|
|
Rent payable |
13,200 |
|
|
Accounts payable |
||
|
Total owed to suppliers on account |
$104,700 |
|
|
Less: 6 month note received from a supplier who purchased |
|
|
|
some used equipment on June 29, 2008 |
2000 |
102,700 |
|
Notes payable |
|
18000 |
|
$146,820 |
||
(d) Other liabilities include the following:
|
10% mortgage on property, plant, and equipment, payable in semiannual |
|
|
installments of $10,000 through June 30, 2013 |
$100,000 |
(e) Owners’ equity includes the following:
|
Preferredstock:20,000sharesoutstanding($20parvalue) |
$400,000 |
|
Commonstock:150,000sharesat$1statedvalue |
. 150,000 |
|
Additional paid in capital |
103,680 |
|
|
$653,680 |
(f) Common shares were originally issued for $394,000, but the losses of the company for the past years were charged against additional paid in capital.
Instructions: Using the account balances and related data, prepare a corrected balance sheet showing individual asset, liability, and owners’ equity balances properly classified.