P5-5 (L03) GROUPWORK (Balance Sheet Adjustment and Preparation) Presented below is the balance sheet of Sargent Corporation for the current year, 2017. SARGENT CORPORATION BALANCE SHEET DECEMBER 31, 2017 Current assets $ 485,000 Current liabilities $ 380,000 Investments 640,000Long-termliabilities1,000,000 Property, plant, and equipment 1,720,000 Stockholders equity 1,770,000 Intangible assets 305,000 $3,150,000 $3,150,000 The following information is presented. 1. The current assets section includes cash $150,000, accounts receivable $170,000 less $10,000 for allowance for doubtful accounts, inventories $180,000, and unearned rent revenue $5,000. Inventory is stated on the lower-of-FIFO-cost-or-net realizable value. 2. The investments section includes the cash surrender value of a life insurance contract $40,000; investments in common stock, short-term $80,000 and long-term $270,000; and bond sinking fund $250,000. The cost and fair value of investments in common stock are the same. 3. Property, plant, and equipment includes buildings $1,040,000 less accumulated depreciation $360,000, equipment $450,000 less accumulated depreciation $180,000, land $500,000, and land held for future use $270,000. 4. Intangible assets include a franchise $165,000, goodwill $100,000, and discount on bonds payable $40,000. 5. Current liabilities include accounts payable $140,000, notes payableshort-term $80,000 and long-term $120,000, and income taxes payable $40,000. 6. Long-term liabilities are composed solely of 7% bonds payable due 2025. 7. Stockholders equity has preferred stock, no par value, authorized 200,000 shares, issued 70,000 shares for $450,000; and common stock, $1.00 par value, authorized 400,000 shares, issued 100,000 shares at an average price of $10. In addition, the corporation has retained earnings of $320,000.