P24.1B (L0 2) (Subsequent Events) Your firm has been engaged to examine the financial statements of Sugarland Corporaments agreee loan. sted. 2 Chapter 24 Full Disclosure in Financial Reporting (b) In 2020, accrued wages in the amount of $134,000 were omitted from the balance sheet, and these expenses were not charged on the income statement. (c) In 2020, a loss of $78,000 (net of tax) on the sale of certain plant assets was debited directly to retained earnings. 3. A major competitor has introduced a line of products that will compete directly with Sugarland's primary line, now being produced in a specially designed new plant. Because of manufacturing innovations, the competitor's line will be of comparable quality but priced 25\% below Sugarland's line. The competitor announced its new line on January 5, 2021. Sugarland indicates that the company will meet the lower prices that are high enough to cover variable manufacturing and selling expenses, but permit recovery of only a portion of fixed costs. 4. You learned on January 16, 2021, prior to completion of the audit, of heavy damage because of a recent tornado to one of Sugarland's two plants; the loss will not be reimbursed by insurance. The newspapers described the event in detail. Instructions Analyze the above information to prepare a corrected balance sheet for Sugarland in accordance with proper accounting and reporting principles. Prepare a description of any notes that might need to be prepared. The books are closed and adjustments to income are to be made through retained earnings