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 80

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.