Reference no: EM131764386

Problem - Preparation of a Corrected Balance Sheet

Presented below and on the next page is the balance sheet of Kishwaukee Corporation as of December 31, 2010.

KISHWAUKEE CORPORATION Balance Sheet December 31, 2010
Assets
Goodwill (Note 2)	$120,000
Buildings (Note 1)	1,640,000
Inventories	312,100
Land	950,000
Accounts receivable	170,000
Treasury stock (50,000 shares, no par)	87,000
Cash on hand	175,900
Assets allocated to trustee for plant expansion
Cash in bank	70,000
U.S. Treasury notes, at cost and fair value	138,000
	$3,663,000
Equities
Notes payable (Note 3)	$600,000
Common stock, authorized and issued, 1,000,000 shares, no par	1,150,000
Retained earnings	858,000
Appreciation capital (Note 1)	570,000
Federal income taxes payable	75,000
Reserve for depreciation recorded to date on the building	410,000
	$3,663,000

Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was $570,000. Depreciation has been recorded based on cost.

Note 2: Goodwill in the amount of $120,000 was recognized because the company believed that book value was not an accurate representation of the fair market value of the company. The gain of $120,000 was credited to Retained Earnings.

Note 3: Notes payable are long-term except for the current installment due of $100,000.

Required - Prepare a corrected classified balance sheet in good form. The notes above are for information only.