Note 1. The reserve for contingencies has been created by charges to earned surplus and has been established to provide a cushion for future uncertainties.

Note 2. The inventory accounts includes only items physically present at the main plant and warehouse. Items located at the company's branch sales office amounting to $40,000 are excluded since the company has consistently followed this procedure for many years. (first thing to do)

Problem 1 Inexperienced Bookkeepers! ince Sheet (including notes) presented below has been submitted to you by an inexperienced bookkeeper Instructions: Prepare a corrected classified balance sheet (including notes). Consider formatting, terminology deficiencies, and classification inaccuracies in your corrections. (See pages 215 and 235 in textbook for examples) Core Industries, Inc. Balance Sheet For the Period Ended 12/31/17 Robrialy blaus, Assets Fixed Assets-Tangible Equipment $110,000 Less: reserve for depreciation (40.000 $ 70,000 Factory supplies 22.000 Land and buildings 400,000 Less: reserve for depreciation (150.000) 250.000 Plant site held for future use 90.000 $ 432,000 Current Assets Accounts receivable 175,000 80,000 Cash 220.000 Inventory 20.000 495,000 Treasury stock (at cost) Fixed Assets-Intangible 80,000 Goodwill 40,000 Notes receivable 26,000 146,000 Patents Deferred Charges 60,000 Advances to salespersons 27,000 Prepaid rent 75,000 162.000 Returnable containers $1.235.000 TOTAL ASSETS Liabilities Current Liabilities $140,000 Accounts payable 8,000 Allowance for doubtful accounts 35,000 Common stock dividend distributable 42.000 Income tax payable 17,000 $ 242,000 Sales tax payable 500,000 Long-term Liabilities, 5% debenture bonds, due 2020 150.000 650.000 Reserve for contingencies 892.000 TOTAL LIABILITIES Equity Capital stock, $10 par value, issued 12,000 shares with $150,000 60 shares held as treasury stock 90,000 Capital surplus (20,000) Dividends paid 123,000 Earned surplus 343.000 TOTAL EQUITY TOTAL LIABILITIES AND EQUITY $1.235 000 Ho co not con The inventory is