In the beginning when it asks for 2019 it means 2016 and when it says 2018 it means 2015.

Apple, Inc., a privately held corporation, is negotiating a loan for expansion purposes and the bank requires audited financial statements. Before closing the accounting records for the year ended December 31, 2019, Apple's controller prepared the following comparative financial statements for 2019 and 2018: Apple, Inc. Balance Sheets December 31, 2016 and 2015 2016 2015 $ 550,000 $300,000 Cash Investment securities (reported at market cost, $142,000) Accounts receivable Allowance for doubtful accounts 156,000 974,000 (100,000) 850,000 620,000 (300.000) $2.750,000 784,000 (64,000) 770,000 434,000 (242.000) $1,982,000 Inventories Property and equipment Accumulated depreciation Total assets $ 154,000 40,000 600,000 0 Accounts payable Accrued expenses Note payable, 5-year Estimated contingent liability Common stock, $10 par Additional paid-in capital 180,000 160,000 600,000 200,000 420,000 260,000 420,000 260,000 for 2019 and 2018: Apple, Inc. Balance Sheets December 31, 2016 and 2015 2016 2015 $300,000 Cash 550,000 Investment securities (reported at market cost, $142,000) Accounts receivable 156,000 974,000 (100,000) 850,000 620,000 (300,000) $2.750.000 0 784,000 (64,000) 770,000 434,000 (242.000) $1,982,000 Allowance for doubtful accounts Inventories Property and equipment Accumulated depreciation Total assets Accounts payable Accrued expenses Note payable, 5-year Estimated contingent liability Common stock, $10 par Additional paid-in capital Retained earnings Total liabilities & owners' equity $180,000 160,000 600,000 200,000 420,000 260,000 930,000 $2,750,000 154,000 40,000 600,000 0 420,000 260,000 508,000 $1,982,000 Apple, Inc. Income Statements For the Years Ended December 31, 2016 and 2015 2016 $3.160.000 2015 $2.500,000 Net sales Operating expenses Cost of sales Selling& administrative Depreciation $1,510,000 984,000 58,000 200,000 $2,752,000 $408,000 14,000 $1,380,000 730,000 36,000 Estimated loss from lawsuit $2.146,000 $ 354,000 Operating income Unrealized gain on investment securities $ 354.000 $ 422.000 Net income During the audit, the following additional information was obtained: (a) The investment portfolio consists of investments in trading securities with a total market value of $156,000 at December 31, 2016. The securities were purchased February 3, 2016, at a cost of $142,000. (b) As a result of errors in physical count, inventories were overstated by $30,000 at December 31, 2016. On January 2, 2016, the cost of equipment purchased for $80,000 was (c) mistakenly charged to repairs and maintenance. Apple depreciates this type of equipment over a 5-year life using the straight-line method, with no residual or salvage value (d) Apple was named as a defendant in a lawsuit in October 2016. Apple's counsel is of the opinion that Apple has a good defense and does not anticipate any impairment of Apple's assets or that any significant liability will be incurred. However, Apple' counsel admits that loss of the suit is "possible." Apple's management wished to be conservative and established a loss contingency of $200,000 at December 31, 2016 (e) On January 24, 2017, before the 2016 financial statements were issued, Apple was notified that one of its largest customers had filed for bankruptcy as the result of a flood that destroyed a substantial portion of the company's assets on January 16, 2017. The customer's accounts receivable balance at December 31, 16, was $144,000. (f)$100,000 of 5-year notes payable will mature September 30, 2017. In view of Quan's plans for expansion, management is seriously considering refinancing the notes when they become due. 5a. Prepare a properly classified balance sheet for Apple, Inc., as of December 31, 2016. (Income tax considerations should be ignored.) 5b. Identify the events and other information that should be disclosed in the notes to Apple's financial statements. (Do not prepare the notes.)