Your firm has been engaged to examine the financial statements of Riverbed Corporation for the year 2020. The bookkeeper who

maintains the financial records has prepared all the unaudited financial statements for the corporation since its organization on

January 2, 2015. The client provides you with the information.

January 2, 2015. The dient provides you with the information. Accounts receivable less allowance of $30,000 471,000 Inventories (LIFO flow assumption) 635.000 51,867,000 Other assets include: Prepaid expenses $62,000 Plant and equipment less accumulated depreciation of $1,428,000 4,129,000 Cashsurrender value of life insurance policy 86,000 Unamortized bond discount 39,600 Notes receivable (short-term) 166,000 Goodwill 256.000 Land 5,188,600450,000 Cument liabilities includes Current liabilities include: Accounts payable Notes payable (due 2023) $501,000 Estimated incometaxes payable 159,000 Premium on common stock 145,000 149.000 $954,000 Long-term liabilities include: Unearned revenue $486,000 Dividends payable (cash) 202,000 8% bonds payable (due May 1,2025) 1,408,000720.000 Stockholders' equity includes: Retained earnings $2.823knn The supplementary information below is also provided. 1. On May 1, 2020, the corporation issued at 94.50,$720,000 of bonds to finance plant expansion. The iong-term bond agreement provided for the annual payment of interest every May 1. The existing plant was pledged as security for the loan. Use the straight-line method for discount amortization. 2. The bookkeeper made the following mistakes. a. In 2018, the ending inventory was overstated by $182,000. The ending inventories for 2019 and 2020 were correctly computed. b. In 2020 , accrued wages in the amount of $223.000 were omitted from the baiance sheet, and these expenses were not charged on the income statement. c. In 2020, a gain of $178.000 (net of tax) on the sale of certain plant assets was eredited directly to retained earnings. 3. A major competitor has introduced a line of products that will compete directly with Riverbed's primary line, now being produced in specially designed new plant. Because of manufacturing innovations, the competitor's line will be of comparable quality but priced 50% below Riverbed's line. The competitor announced its new line on January 14, 2021. Riverbed indicates? 3. Amajor competitor has introduced a line of products that will compete directly with Riverbed's primary line, now being produced in a specially designed new plant. Because of manufacturing innovations, the competitor's line will be of comparable quality but priced 50% below Riverbed's line. The competitor announced its new line on January 14, 2021. Riverbed indicates that the company will meet the lower prices that are high enough to cover variable manufacturing and selling expenses, but permit recovery of only a portion of fixed costs: 4. You learned on January 28, 2021. prior to completion of the audit, of heavy damage becaust of recent fire to one of Riverbed's two plants; the loss will not be reimbursed by insurance. The newspapers described the event in detail. Analyze the above information to prepare a corrected balance sheet for Riverbed in accordance with proper accounting and reporting principles. Prepare a description of any notes that might need to be prepared. The books are closed and adjustments to income are to be made through retained earnings. (List Current Assets in order of liquidity.) Assets Current Acsets Cash Accounts Reccivabie Alowance for Doubtful Accounts Notes Recelvable Inventorien Prepaid txpenses rotal Curcent Assets 3 Investments in Laind Cash Surrender Value of Life insurance Policy Cash Restricted for Piant Expanision Property, Plant and Equlpment. Plantsnd Equlpment Accumalated Depreciation intinelble Assets Condunit $ Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Unearned Revenue Dividends Payable Salaries and Wages Payabie Income Taves Payable interest Payable: TotalCurrent Lisbilleles Lons-term Linbilities $ Notes Payatic Bonds Payable. Total Liabinties Stockholders' Equity Common Stock Paiduin Capitalin Excess of Par RetaincdEarthingi Totalsted tiokers Eawity