The bookkeeper for Reliable Computers, Inc., reports the following balance sheet amounts as of June 30, 2008.

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $233,400

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        667,100

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        146,820

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       100,000

Owners’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      653,680

A review of account balances reveals the following data.

(a) An analysis of current assets discloses the following:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $ 47,500

Investment securities—trading . . . . . . . . . . . . . . . . . . . . .      55,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     51,900

Inventories, including advertising supplies of $2,000 . . . .     79,000

$233,400

(b) Other assets include the following:

Property, plant, and equipment:

Depreciated book value (cost, $670,000) . . . . . . . . . . . . . . . . . . . $574,000

Deposit with a supplier for merchandise ordered

for August delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       5,200

Goodwill recorded on the books to cancel losses incurred

by the company in prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . .   87,900

$667,100

(c) Current liabilities include the following:

(d) Other liabilities include the following:

10% mortgage on property, plant, and equipment, payable in semiannual

installments of $10,000 through June 30, 2013 . . . . . . . . . . . . .        $100,000

(e) Owners’ equity includes the following:

Preferred stock: 20,000 shares outstanding ($20 par value) . . . .       $400,000

Common stock: 150,000 shares at $1 stated value . . . . . . . . . . .       150,000

Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        103,680

$653,680

(f) Common shares were originally issued for $394,000, but the losses of the company for the past years were charged against additional paid-in capital.

Instructions: 

Using the account balances and related data, prepare a corrected balance sheet showing individual asset, liability, and owners’ equity balances properly classified.

Transcribed Image Text:

Payroll payable Taxes payable. Rent payable. Accounts payable Total owed to suppliers on account Less: 6-month note received from a supplier who purchased some used equipment on June 29, 2008. Notes payable $ 8,250 4,670 13,200 $104,700 2,000 102,700 18,000 $146,820