The accountant for Delicious Bakery prepares the following condensed balance sheet.
Delicious Bakery
Condensed Balance Sheet
December 31, 2013
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,415
Less: Current liabilities . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29,000
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,415
Add: Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,120
$99,535
Less: Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3,600
Investment in business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $95,935
A review of the account balances disclosed the following data.
(a) An analysis of the current asset grouping revealed the following:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .$10,600
Accounts receivable (fully collectible) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,500
Notes receivable (notes of customer who has been declared bankrupt and
is unable to pay anything on the obligations) . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Investment securities-trading, at cost (market value $2,575) . . . . . . . . . . . . . . . 4,250
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,965
Cash surrender value of insurance on officers' lives . . . . . . . . . . . . . . . . . . . . . . . 4,100
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . $53,415
The inventory account was found to include supplies costing $425, a delivery truck acquired at the end of 2013 at a cost of $2,100, and fixtures at a depreciated value of $10,400. The fixtures had been acquired in 2005 at a cost of $12,500.
(b) The total for other assets was determined as follows.
Land and buildings at cost of acquisition, July 1, 2011 . . . . . . . . . . . . . . . . . . . . . .$92,000
Less balance due on mortgage, $16,000, and accrued interest on mortgage, $880 (mortgage is payable in annual installments of $4,000 on July 1 of each year
together with interest for the year at that time at 11%) . . . . . . . . . . . . . . . . . . . . . .16,880
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . $75,120
It was estimated that the land at the time of the purchase was worth $30,000. Buildings as of December 31, 2013, were estimated to have a remaining life of 17½ years.
(c) Current liabilities represented balances that were payable to trade creditors.
(d) Other liabilities consisted of withholding, payroll, real estate, and other taxes payable to the federal, state, and local governments. However, no recognition was given the accrued salaries, utilities, and other miscellaneous items totaling $350.
(e) The company was originally organized in 2006 when 5,000 shares of no-par stock with a stated value of $5 per share were issued in exchange for business assets that were recognized on the books at their fair market value of $55,000.
Instructions:
Prepare a corrected balance sheet with the items properly classified?