*Problem 24-1 Your firm has been engaged to examine the financial statements of Vaughn Corporation for the year 2017. The bookkeeper who maintains the financial records has prepared all the unaudited financial statements for the corporation since its organization on January 2, 2012. The client provides you with the information below VAUGHN CORPORATION BALANCE SHEET DECEMBER 31, 2017 Asset Liabilities Current assets $1,875,000 Current liabilities Long-term liabilities Capital $964,000 1,402,000 4,811,160 $7,177,160 Other assets 5,302,160 $7,177,160 An analysis of current assets discloses the following Cash (restricted in the amount of $306,000 for plant expansion) Investments in land Accounts receivable less allowance of $30,000 Inventories (LIFO flow assumption) $576,000 187,000 475,000 637,000 $1,875,000 Other assets include: Prepaid expenses Plant and equipment less accumulated depreciation of $1,440,000 Cash surrender value of life insurance policy Unamortized bond discount Notes receivable (short-term) Goodwill Land $63,000 4,203,000 85,000 92,160 162,000 254,000 443,000 $5,302,160 Current liabilities include: Accounts payable Notes payable (due 2020) Estimated income taxes payable Premium on common stock $512,000 159,000 146,000 147,000 $964,000 Long-term liabilities include: Unearned revenue Dividends payable (cash) 8% bonds payable (due May 1, 2022) $484,000 198,000 720,000 $1,402,000