complex Balance Sheet

Presented below is the unaudited balance sheet as of December 31, 2016, prepared by Zeus Manufacturing Corporations bookkeeper.

Your company has been engaged to perform an audit, during which you discover the following information:

Checks totaling $14,000 in payment of accounts payable were mailed on December 31, 2016, but were not recorded until 2017. Late in December 2016, the bank returned a customers $2,000 check marked "NSF," but no entry was made. Cash includes $100,000 restricted for building purposes.

Included in accounts receivable is a $30,000 note due on December 31, 2019, from Zeuss president.

During 2016, Zeus purchased 500 shares of common stock of a major corporation that supplies Zeus with raw materials. Total cost of this stock was $51,300, and fair value on December 31, 2016, was $47,000. The decline in fair value is considered temporary. Zeus plans to hold these shares indefinitely.

Treasury stock was recorded at cost when Zeus purchased 200 of its own shares for $32 per share in May 2016. This amount is included in investments.

On December 31, 2016, Zeus borrowed $500,000 from a bank in exchange for a 10% note payable, maturing December 31, 2021. Equal principal payments are due December 31 of each year beginning in 2017. This note is collateralized by a $250,000 tract of land acquired as a potential future building site, which is included in land.

The mortgage payable requires $50,000 principal payments, plus interest, at the end of each month. Payments were made on January 31 and February 28, 2017. The balance of this mortgage was due June 30, 2017. On March 1, 2017, prior to issuance of the audited financial statements, Zeus consummated a noncancelable agreement with the lender to refinance this mortgage. The new terms require $100,000 annual principal payments, plus interest, on February 28 of each year, beginning in 2018. The final payment is due February 28, 2025.

The lawsuit liability will be paid in 2017.

Of the total deferred tax liability, $5,000 is considered a current liability.

The current income tax expense reported in Zeuss 2016 income statement was $61,200.

The company was authorized to issue 100,000 shares of $50 par value common stock.

Required:

Prepare a corrected classified balance sheet as of December 31, 2016.

Zeus Manufacturing Corporation Balance Sheet for the Year Ended December 31, 2016 Assets Cash Accounts receivable (net 345,700 Inventories Prepaid income taxes Investments Land Building Machinery and equipment 1,964,000 Goodwill Total Assets Liabilities and Shareholders' Equity Accounts payable Mortgage payable Notes payable Lawsuit liability Income taxes payable Deferred tax liability Accumulated depreciation Total Liabilities Common stock, $50 par, 40,000 shares issued Retained earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity $225,000 $133,800 900,000 500,000 80,000 61,200 28,000 420,000 $2,123,000 $2,231,000 1,075,400 $3,306,400 $5,429,400 560,000 40,000 57,700 450,000 1,750,000 37,000 $5,429,400