Ingalls Corporation
Comparative Balance Sheet
As of December 31, 20x4 and 20x3											Corrective Journal Entries
Assets						December 31, 2014	December 31, 2013				Allowance for uncollected		10000
Current Assets:											Admin expense			10000
Cash						163,000.00	82,000.00
Accounts Receivables						392,000.00	296,000.00				Securities for Sale		16,000
Allowance for doubtful accounts						(37,000.00)	(18,000.00)				Change in estimate			16000
Investments in available for sale securities						78,000.00	78,000.00
Inventory						207,000.00	202,000.00				Retained Earnings		4,000
	Total Current Assets					803,000.00	640,000.00				Cost of Sales		2,100
Property, plant & equipment											Merchandise Inventory			6,100
	equipment					167,000.00	169,500.00
	Accumulated Depreciation					(121,600.00)	(106,400.00)				Equipment		12000
Totall property, plant and equipment						45,400.00	63,100.00				Operating expense		1100
	Total Assets					848,400.00	703,100.00				Retained Earnings			10900
											Accumulated Depr			2200
Liabilities and Shareholders Equity
Liabilities											Accumulated Depr		17500
Accounts payable						121,400.00	196,100.00				Equipment			15000
Shareholders equity											Other income			2500
Common stock par value $10, authorize
50,000 shares issued aand outstanding 20,000											Prepaid expenses		900
Shares						260,000.00	260,000.00				Operating Expenses		900
Retained Earnings						467,000.00	247,000.00				Retained Earnings			1800
Total Shareholders equity						727,000.00	507,000.00
Total Liabilities and Shareholders Equity						848,400.00	703,100.00				Common Stock		60000
	Question: Create updated balance sheet after corrective Journal entries have been made. Ingalls Corporation is in the process of negotiating a loan for expansion purposes. The books and records have never been audited, and the bank has requested that an audit be performed. Ingalls has prepared the following comparative financial statements for the years ended December 31, 20x4, and 20x3. Ingalls Corporation is in the Athletic Sportswear Industry and their business is merchandising. You have been asked to review the statements to ensure its accuracy and freedom from errors and omissions. During your audit, some of the findings included the following facts: An analysis of collections and losses on accounts receivable during the past 2 years indicated a drop in anticipated losses because of bad debts. After consultation with management, it was agreed that the loss experience rate should be reduced from the recorded 2% to 1% of sales beginning with the year ended December 31, 20x4. An analysis of the available for-sale securities revealed that this portfolio consisted entirely of short-term investments in marketable equity securities that were acquired in 20x3. The total market valuation for these investments as of the end of the year was as follows:December 31, 20x3 $ 81,000.00, and December 31, 20x4 $ 62,000.00. Management intends to sell these securities if the need arises. The merchandise inventory at December 31, 2013, was overstated by $ 4,000.00, and the merchandise inventory at December 31, 20x4 was overstated by $ 6,100.00. On January 2, 20x3, equipment costing $ 12,000.00 (with an estimated life of 10 years and residual value of $1,000.00) was incorrectly charged to Operating expenses. Ingalls records depreciation via the straight line method. In 20x4, fully depreciated equipment (with no residual value) that originally cost $ 17,500.00 was sold at scrap value of $ 2,500.00. Ingalls credited the proceeds of $ 2,500.00 to the equipment account. An analysis of 20x3 operating expenses revealed that Ingalls charged the following item to expense: a 3 year insurance premium in the amount of $ 2,700.00 that started and was recorded on January 2, 20x3.										Paid in Capital excess of Par			60000