Prepare a revised balance sheet for the business

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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.)

Assets

Liabilities & Owners' Equity

Cash

$1,500,000

Accounts Payable

$700,000

Accounts Receivable

$1,000,000

Accrued Expenses Payable

$600,000

Inventory

$1,800,000

Short-term Notes Payable

$1,500,000

Prepaid Expenses

$300,000

Total Current Liabilities

$2,800,000

Total Current Assets

$4,600,000

Long-term Notes Payable

$2,000,000

Property, Plant, & Equipment

$4,800,000

Owners Equity:

 

Accumulated Depreciation

($1,400,000)

Capital Stock (10,000 shares)

$1,000,000

Cost Less Depreciation

$3,400,000

Retained Earnings

$2,200,000

Total Assets

$8,000,000

Total Owners' Equity

$3,200,000

   

Total Liabilities & Owners' Equity

$8,000,000

Reference no: EM13535039

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