The following balance sheet was prepared by the accountant for Midway Company. Midway Company Balance Sheet June

Question:

The following was prepared by the accountant for Midway Company.
Midway Company
Balance Sheet
June 30, 2011
Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 44,500
Investment securities—Trading (includes long-term investment of $275,000 in stock
of Bahen Builders) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328,700
Inventories (net of amount still due suppliers of $50,000) . . . . . . . . . . . . . 585,100
Prepaid expenses (includes a deposit of $25,000 made on inventories to be delivered
in 18 months) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000
Property, plant, and equipment (excluding $60,000 of equipment still in use,
but fully depreciated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000
Goodwill (based on estimate by the president of Midway Company) . . . . . 85,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,379,300
Liabilities and Owners’ Equity
Notes payable ($95,000 due in 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150,000
(not including amount due to
suppliers of inventory—see above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190,000
Long-term liability under pension plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,000
Retained earnings restricted for building expansion . . . . . . . . . . . . . . . . . 112,000
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,000
Bonds payable (net of discount of $25,000) . . . . . . . . . . . . . . . . . . . . . . . . 300,000
Deferred income tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,000
Common stock (15,000 shares, $1 par) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227,200
Unrestricted retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,100
Total liabilities and owners’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,379,300

Instructions:
Prepare a corrected classified using appropriate account titles.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...