The company's most recent balance sheet given below. The business uses very conservative accounting methods for certain expenses, but it could have used more liberal accounting methods for these expenses. The more liberal accounting methods would have caused the following results:
- Accounts receivable balance would have been $50,000 higher
- Inventory would have been $225,000 higher
- Accumulated depreciation would have been $300,000 lower
Using the landscape format, prepare a revised balance sheet for the business giving effect to these differences. (Ignore income tax effects.)
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Assets
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Liabilities & Owners' Equity
|
|
Cash
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$1,500,000
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Accounts Payable
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$700,000
|
|
Accounts Receivable
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$1,000,000
|
Accrued Expenses Payable
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$600,000
|
|
Inventory
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$1,800,000
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Short-term Notes Payable
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$1,500,000
|
|
Prepaid Expenses
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$300,000
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Total Current Liabilities
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$2,800,000
|
|
Total Current Assets
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$4,600,000
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Long-term Notes Payable
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$2,000,000
|
|
Property, Plant, & Equipment
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$4,800,000
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Owners Equity:
|
|
|
Accumulated Depreciation
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($1,400,000)
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Capital Stock (10,000 shares)
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$1,000,000
|
|
Cost Less Depreciation
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$3,400,000
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Retained Earnings
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$2,200,000
|
|
Total Assets
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$8,000,000
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Total Owners' Equity
|
$3,200,000
|
| |
|
Total Liabilities & Owners' Equity
|
$8,000,000
|