Question - Preparation of a Corrected Balance Sheet
Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.
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BRUNO COMPANY Balance Sheet December 30, 2010
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Current assets
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Cash
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$232,100
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Accounts receivable (net)
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325,100
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Inventories at lower of average cost or market
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401,000
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Trading securities-at cost (fair value $120,000)
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140,000
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Property, plant, and equipment
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Building (net)
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573,870
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Office equipment (net)
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160,000
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Land held for future use
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178,870
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Intangible assets
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Goodwill
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80,000
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Cash surrender value of life insurance
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90,000
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Prepaid expenses
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12,000
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Current liabilities
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Accounts payable
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108,870
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Notes payable (due next year)
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127,100
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Pension obligation
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82,000
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Rent payable
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51,100
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Premium on bonds payable
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53,000
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Long-term liabilities
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Bonds payable
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503,870
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Stockholders' equity
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Common stock, $1.00 par, authorized
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400,000 shares, issued 290,000
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290,000
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Additional paid-in capital
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160,000
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Retained earnings
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?
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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.