Reference no: EM13507098

Preparation of a Corrected Balance Sheet Presented below and on the next page is the balance sheet of Kishwaukee Corporation as of December 31, 2012.

Assets
Goodwill (Note 2)		$ 120,000
Buildings (Note 1)		1,640,000
Inventory		312,100
Land		950,000
Accounts receivable		170,000
Treasury stock (50,000 shares)		87,000
Cash on hand		175,900
Assets allocated to trustee for plant expansion
Cash in bank		70,000
Debt investments (held-to-maturity)		138,000
		$3,663,000
Equities
Notes payable (Note 3)			$ 600,000
Common stock, authorized and issued, 1,000,000 shares, no par			1,150,000
Retained earnings			858,000
Appreciation capital (Note 1)			570,000
Income tax payable			75,000
Reserve for depreciation recorded to date on the building			410,000
			$3,663,000

Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was $570,000. Depreciation has been recorded based on cost.

Note 2: Goodwill in the amount of $120,000 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. The gain of $120,000 was credited to Retained Earnings.

Note 3: Notes payable are long-term except for the current installment due of $100,000.

Instructions

Prepare a corrected classified balance sheet in good form. The notes above are for information only.