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Plant and equipment less accumulated depreciation of $ 1 , 4 1 9 , 0 0 0 4 , 1 1 1 , 0 0
Plant and equipment less accumulated depreciation of $ Cash surrender value of life insurance policy Unamortized bond discount Notes receivable shortterm Goodwill Land Current liabilities include: Accounts payable Notes payable due Estimated income taxes payable Premium on common stock Longterm liabilities include: Unearned revenue Dividends payable cash bonds payable due May $ $ Stockholders' equity includes: Retained earnings Common stock, par value $; authorized shares, shares issued $ table$ The supplementary information below is also provided. On May the corporation issued at $ of bonds to finance plant expansion. The longterm bond agreement provided for the annual payment of interest every May The existing plant was pledged as security for the loan. Use the straightline method for discount amortization. The bookkeeper made the following mistakes. a In the ending inventory was overstated by $ The ending inventories for and were correctly computed. b In accrued wages in the amount of $ were omitted from the balance sheet, and these expenses were not charged on the income statement. c In a gain of $net of tax on the sale of certain plant assets was credited directly to retained earnings. A major competitor has introduced a line of products that will compete directly with Sunland'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 below Sunland's line. The competitor announced its new line on January Sunland 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. You learned on January prior to completion of the audit, of heavy damage because of a recent fire to one of Sunland's two plants; the loss will not be reimbursed by insurance. The newspapers described the event in detail. Analyze the above information to prepare a corrected balance sheet for Sunland 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. List Current Assets in order of liquidity. SUNLAND CORPORATION Balance Sheet Assets $ $ :: $ longrightarrow Liabilities and Stockholders' Equity Current Attempt in Progress Your firm has been engaged to examine the financial statements of Sunland Corporation for the year The bookkeeper who maintains the financial records has prepared all the unaudited financial statements for the corporation since its organization on January The client provides you with the following information. An analysis of current assets discloses the following. Other assets include:
Plant and equipment less accumulated depreciation of $
Cash surrender value of life insurance policy
Unamortized bond discount
Notes receivable shortterm
Goodwill
Land
Current liabilities include:
Accounts payable
Notes payable due
Estimated income taxes payable
Premium on common stock
Longterm liabilities include:
Unearned revenue
Dividends payable cash
bonds payable due May
$
$ Stockholders' equity includes:
Retained earnings
Common stock, par value $; authorized shares, shares issued
$
table$
The supplementary information below is also provided.
On May the corporation issued at $ of bonds to finance plant expansion. The longterm bond
agreement provided for the annual payment of interest every May The existing plant was pledged as security for the loan.
Use the straightline method for discount amortization.
The bookkeeper made the following mistakes.
a In the ending inventory was overstated by $ The ending inventories for and were correctly
computed.
b In accrued wages in the amount of $ were omitted from the balance sheet, and these expenses were not
charged on the income statement.
c In a gain of $net of tax on the sale of certain plant assets was credited directly to retained earnings.
A major competitor has introduced a line of products that will compete directly with Sunland'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 below Sunland's line. The competitor announced its new line on January Sunland 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.
You learned on January prior to completion of the audit, of heavy damage because of a recent fire to one of
Sunland's two plants; the loss will not be reimbursed by insurance. The newspapers described the event in detail. Analyze the above information to prepare a corrected balance sheet for Sunland 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. List Current Assets in order of liquidity.
SUNLAND CORPORATION
Balance Sheet
Assets
$
$
::
$
longrightarrow
Liabilities and Stockholders' Equity Current Attempt in Progress
Your firm has been engaged to examine the financial statements of Sunland Corporation for the year The bookkeeper who
maintains the financial records has prepared all the unaudited financial statements for the corporation since its organization on
January The client provides you with the following information.
An analysis of current assets discloses the following.
Other assets include:
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