Uhura Company has decided to expand its operations.
The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.
FOR THE YEAR ENDED 2007
Accounts receivable (net) 340,000
Inventories at lower of average cost or market 401,000
Trading securities-at cost (fair value $120,000) 140,000
Property, plant, and equipment
Building (net) 570,000
Office equipment (net) 160,000
Land held for future use 175,000
Cash surrender value of life insurance 90,000
Prepaid expenses 12,000
Accounts payable 135,000
Notes payable (due next year) 125,000
Pension obligation 82,000
Rent payable 49,000
Premium on bonds payable 53,000
Bonds payable 500,000
Common stock, $1.00 par, authorized
400,000 shares, issued 290,000 290,000
Additional paid-in capital 160,000
Retained earnings ?
Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $160,000 and for the office equipment, $105,000. The allowance for doubtful accounts has a balance of $17,000. The pension obligation is considered a long-term liability.
The solution explains how to prepare a corrected balance sheet in an Excel attachment where the workings out can be viewed by highlighting the cell in question.