BACK Your firm has been engaged to examine the financial unaudited financial statements for the corporation since its organization on January 2, 2012. The client provides you with the information below ts of Sandhil C SANDHILL CORPORATIONN DECEMBER 31, 2017 Current assets Other assets $1,899,000 Current liabilities $956,000 5,138,660 Long-term liabilities 1,471,000 4,610,660 $7,037,660 Capital An analysis of current assets discloses the following Cash (restricted in the amount of $298,000 for plant expansion) Investments in land Accounts receivable less allowance of $30,000 $582,000 187,000 487,000 643,000 $1,899,000 (LIFO flow assumption) $62,000 4,110,000 83,000 36,660 161,000 247,000 439,000 $5,138,660 Plant and equipment less accumulated depreciation of $1,412,000 Cash surrender value of life insurance policy d bond discount Goodwill Land Current liabilities include: $503,000 158,000 Accounts payable Notes payable (due 2020) Pgup End NEXT $503,000 158,000 145,000 150,000 $956,000 Notes payable (due 2020) Estimated income taxes payable liabilities include: Unearned revenue Dividends payable (cash) 896 bonds payable (due May 1, 2022) $493,000 198,000 780,000 $2,790,660 Common stock, par value $10; authorized 200,000 shares, 182,000 shares issued 1,820,000 $4,610,6640 1. On May 1, 2017, the corporation issued at 95.30, $780,000 of bonds to finance plant expansion. The long-term bond agreement provided for the annual payment of interest every May 1. The existing plant was pledged as security for the loan. Use the straight-line method for discount amortization 2. The bookkeeper made the following mistakes (a) In 2015, the ending inventory was overstated by $185,000. The ending inventories for 2016 and 2017 were correctly computed (b) In 2017, accrued wages in the amount of $222,000 were omitted from the belance sheet, and these expenses were not charged on the income statement (c) In 2017, a gain of $175,000 (net of tax) on the sale of certain plant assets was credited directly to retained earnings. a line of 3. A major competitor has below Sandhill's line. The competitor announced its new line on January 14, 2018 line wil be of comparable quality but priced 50% Sandhill indietis ht he company will meet the lower pr ces that are hig h enough to cover vanable manufacturing and selling expenses, but permit recovery of only a portion of foxed costs in detail. for might need to be prepared. The books are closed and adjustments to income are to be name only and do not p 347 PM PgUp End 0 1