Eastland Company and Westside Company are competing businesses. Both began operations 6 years ago and are quite similar in most respects. The current balance sheet data for the two companies are shown below.

You have been engaged as a consultant to conduct a review of the two companies. Your goal is to determine which of them is in the stronger financial position.
Your review of their financial statements quickly reveals that the two companies have not followed the same accounting practices. The differences and your conclusions regarding them are summarized below.
1. Eastland Company has used the allowance method of accounting for bad debts. A review shows that the amount of its write-offs each year has been quite close to the allowances that have been provided. It therefore seems reasonable to have confidence in its current estimate of bad debts.
Westside Company has used the direct write-off method for bad debts, and it has been somewhat slow to write off its uncollectible accounts. Based upon an aging analysis and review of its accounts receivable, it is estimated that $18,000 of its existing accounts will probably prove to be uncollectible.
2. Eastland Company has determined the cost of its merchandise inventory on a LIFO basis.
The result is that its inventory appears on the balance sheet
 at an amount that is below its current replacement cost. Based upon a detailed physical examination of its merchandise on hand, the current replacement cost of its inventory is estimated at $513,000.
Westside Company has used the FIFO method of valuing its merchandise inventory.
Its ending inventory
 appears on the balance sheet
 at an amount that quite closely approximates its current replacement cost.
3. Eastland Company estimated useful life of 12 years and a salvage value of $30,000 for its plant and equipment. It has been depreciating them on a straight-line basis. Westside Company has the same type of plant and equipment. However, it estimated useful life of 10 years and a salvage value of $10,000. It has been depreciating its plant and equipment using the double-declining-balance method.
Based upon engineering studies of these types of plant and equipment, you conclude that Westside's estimates and method for calculating depreciation are the more appropriate.
4. Among its current liabilities, Eastland has included the portions of long-term liabilities that become due within the next year. Westside has not done so.
You find that $16,000 of Westside's $82,000 of long-term liabilities are due to be repaid in the current year.

Instructions
(a) Revise the balance sheets presented above so that the data are comparable and reflect the current financial position for each of the two companies.
(b) Prepare a brief report to your client stating your conclusions.

Eastland Westside Company $ 63,300 Company $ 48,400 302,500 Cash Accounts receivable 304,700 (13,600) 463,900 255,300 (112,650) Allowance for doubtful accounts -0- Inventory Plant and cquipment Accumulated depreciation, plant and equipment 515,200 257,300 (189,850) Total assets $960,950 $933,550 Current liabilities $440,200 $431,500 Long-term liabilities 78,000 82,000 Total liabilities Stockholders' equity 518,200 442,750 513,500 420,050 Total liabilitics and stockholders' cquity $960,950 $933,550