Rhoads Corporation

Balance Sheet

For the year ended December 31, 2022

Assets		Equities
Goodwill (Note 2)	185,000	Note Payable (Note 3)	730,000
Buildings (Note 1)	1,840,000	Common Stock, no par; authorized and issued 500,000 shares; 425,000 shares outstanding	1,190,000
Inventory	268,000	Retained Earnings	968,000
Land	850,000	Capital Appreciation (Note 1)	475,000
Accounts Receivable	180,000	Income Tax Payable	76,000
Treasury Stock (40,000 shares)	86,000	Reserve for building deprecation	517,000
Cash	365,000	Estimated Uncollectible Accounts	12,000
Debt Investments (Held-to-Maturity) Matures 6/30/24	212,000	Accounts Payable	18,000
Total Assets	3,986,000	Total Equities	3,986,000

Note 1: Buildings are stated at historical cost, except for one building that was recorded at appraised value. The excess of appraisal over cost was $475,000. However, depreciation has been recorded on all buildings based on historical cost.

Note 2: Goodwill in the amount of $185,000 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. Therefore, the company internally generated $185,000 of goodwill and recorded the gain to Retained Earnings.

Note 3: The Note Payable was incurred for the purchase of the building. It is an installment note and $125,000 of the principal will be paid during 2023 and $165,000 during 2024.

Instructions: The above balance sheet was prepared by an inadequately trained accountant. Review the balance sheet and the 3 supplemental notes. Using the classifications, account titles, and terminology you learned this semester, prepare a classified balance sheet in good form.