Problem 1 (15 Points) You have been asked to assist the chief accountant of the Stephen King Corporation in the preparation of a balance sheet. Presented below is the balance sheet of Stephen King Corporation for the current year, 2011 Stephen King Corporation BALANCE SHEET December 31, 2011 Current assets Investments Pro Intangible assets $ 435,000 and 1.720,000 5,000 Current liabilities S 330,000 Stockholders' equity Consider the following information: 1. The current assets section includes: cash $100,000, accounts receivable $170,000 less $10,000 for allowance for doubtful accounts, inventories $180,000, and unearned revenue $5,000. The cash balance is composed of $114,000, less a bank overdraft of $14,000. Inventories are stated on the lower of the FIFO cost or market. The investments section includes: the cash surrender value of a life insurance contract $40,000; 2. investment in common stock, short-term (rading) $30,000 and long-term (available-for-sale) $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 4. Intangible assets include: a franchise $165,000; goodwill $100,000; and discount on bonds payable 5. Current liabilities include: accounts payable $90,00, notes payable-short term $80,000 and long- 0; equipment S450,000 less accumulated depreciation $1S0,000; land $500,000, and land held for future use $270,000. $40,000. term $120,000; and taxes payable $40,000. Long-tenn liabilities are compose solely of10% bonds payable due in 2020. 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 S10. In addition, the corporation has retained eanings of $320,000. 6. 7. The company's management does not elect to use the fair value option for any of its financial assets or liabilities. Prepare a Classified balance sheet