You recently joined the internal auditing department of Kaitlyn Sportswear Corporation. As one of your first assignments, you are examining a balance sheet prepared by a staff accountant. Prepare a classified balance sheet in good form to better represent Kaitlyn Sportswear Corporation.

Kaitlyn Sportswear Corporation

At December 31, 2018

Assets

Cash $ 220 Accounts receivable, net 340 Note receivable 8 Inventories 600 Prepaid expenses 40 Land 500 Buildings, net 2,200 Equipment, net 400 Investments 50 Patent 60 Total assets $4,490

Liabilities and Shareholders' Equity Accounts payable $ 165 Salaries payable 75 Interest payable 45 Note payable 300 Bonds payable 500 Deferred revenue 80 Total liabilities 1,165 Common stock 2,000 Retained earnings 1,325 Total shareholders' equity 3,181 Total liabilities and shareholders' equity $4,490

In the course of your examination of the company files, you uncover the following information pertaining to the balance sheet:

1. The land and buildings represent the corporate headquarters and manufacturing facilities. 2. The note receivable is due in 2020. The balance of $80 includes $5 of accrued interest. The next interest payment is due in July 2019. 3. The note payable is due in installments of $50 per year. Interest on both the notes and bonds is payable annually. 4. The company's investments consist of marketable equity securities of other corporations. Management does not intend to liquidate any investments in the coming year. 5. Deferred revenue will be recognized ratably (equally) over the next two years. 6. Accumulated Depreciation for the building is $1,200. 7. Accumulated Depreciation for equipment is $170. 8. Allowance for Bad Debt is $65,000