Chapter Three Homework The following unclassified balance sheet contains several errors. Some are described below. Some occur in the balance sheet itself. The investments account consists of three investments stock holdings. 1) $10,000 of U.S. T Bills that mature in 45 days. Bubble defines cash equivalents as securities that mature in three months or less. 2) A $15,000 stock investment that management plans to sell in the upcoming year. 3) The remainder is a debt investment the company plans to hold for five ten years. The inventory account was revalued to its fair value. The offsetting credit was "Appreciation of Inventory". Its cost was $152,000. (This is not GAAP) Included in the receivables account is a note receivable from a company officer in the amount of $85,000 Included in the land account is $75,000 lot that is being held for speculative purposes. The notes payable consist of two separate loans. 1) An $80,000 note that is due in 2021 2) The remaining $100,000 loan requires ten annual payments on June 30 of each year. o Cumulative net incomes of the company less dividends total $141,000 Complete a corrected Classified Balance Sheet on the work paper provided. Bubble Company Balance Sheet December 31, 2020 Cash Receivables Investments Merchandise Inventory Land Equipment Accounts payable Allowance for uncollectible accounts Accumulated Depreciation Appreciation of inventory Notes payable Stockholders' equity $ 42.000 190,000 90,000 197.000 250.000 340,000 $1,109,000 143.000 10,000 220,000 45,000 180,000 511,000 $1.109.000 Company Balance Sheet At December 31, 2020 Assets Lawren assets Total ourrent assets investments Total investments Premeria wand equier Net property, plant & equipment Total assets Liabilities and Stockholders' Equity Awen latives Total current liabilities 2cmg-term latives Stockholders'Equity