I4-1: An inexperienced bookkeeper for the Soggy Ground

I4-1: An inexperienced bookkeeper for the Soggy Ground

I4-1: 
An inexperienced bookkeeper for the Soggy Ground Construction Company has prepared the following balance sheet.
Soggy Ground Construction CompanyBalance SheetFor the Year Ended December 31, xxxx
Current AssetsCash $149,500Accounts receivable (net) 220,000Inventories at lower of average cost or market 260,000Trading securities at cost 90,000Property, plant, and equipmentBuilding (net) 375,000Office equipment (net) 105,000Land held for future use 110,000Intangible assetsGoodwill 52,000Cash surrender value of life insurance 60,000Prepaid expenses 8,000Current LiabilitiesAccounts payable 87,500Notes payable (due within 1 year) 80,000Pension obligation 53,500Rent payable 30,500Discount on bonds payable 35,000Long-term liabilitiesBonds payable 350,000Stockholders’ equityCommon stock, $5.00 par, authorized 100,000 shares, issued 39,000 shares 195,000Additional paid-in capital 105,000
Additional information:
The trading securities have a fair market value of $77,500 on December 31.
The company has no employee eligible to retire and receive pension benefits for at least the next 3 years.
Total life-to-date depreciation expense for the building is $105,000.
Total life-to-date depreciation expense for the office equipment is 65,500.
Allowance for doubtful accounts has a credit balance of $11,500.
The bookkeeper is unsure how to compute the proper balance in retained earnings
Instructions:
Prepare a correct classified balance sheet in good form.
 
 

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