First-year operation of ABC Company is 2016.

Below is B/S and I/S of ABC Company for 2016. As an analyst, you think that Allowance for Uncollectible Accounts seems understated. You think the appropriate amount based on industry standard should be $12,000. Restate I/S and B/S as of 12/31/2016, assuming Allowance for Uncollectible Accounts is $12,000. Assume that tax rate is 40%.

Income Statement For the period ended 12/31/2016 Sales 80,000 COGS 30,000 Gross Profit 50,000 Salaries Expense 6,000 Rent Expense 6,000 Warranty Expense Depreciation Expense Bad Debt Expense 4,000 3,000 8,400 Other Operating Expense Operating Income 6,000 16,600 Other Income 3,000 Other Expense 9,366 Income Before Tax 10,234 Income Tax Expense 4,640 Net Income 5,594 Balance Sheet As of 12/31/2016 Current Assets Current Liabilities Cash 90,660 Accounts Payable 30,000 Warranty Liabilities 4,000 Income Taxes Payable 5,600 Accounts Receivable 80,000 Allow ance for Uncollectible Accounts (8,400) Deferred Tax Liabilities 1,200 Accounts Receivable, Net 71,600 Inventory 20,000 Long-term Liabilities Investment 13,000 Deferred Tax Assets 4,960 Bonds Payable 100,000 Discount (4,974) Bonds Payable, Net 95,026 Deferred Tax Liabilities 2,800 Long-term Assets Shareholders' Equity Equipment 30,000 Accumulated Depreciation (3,000) Common Stock 10,000 Equipment, Net 27,000 ($10 par value per share, Issued 1,000 shares, Outstanding 900 shares) APIC 90,000 Retained Earnings 3,594 Treasury Stock (15,000) Total Liabilities & Shareholders' Equity 227,.220 Total Assets 227,220