Your firm has been engaged to examine the financial statements of Sunland 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 SUNLAND CORPORATION BALANCE SHEET DECEMBER 31, 2017 Current assets Other as $1,367,000 5,188,600 Current liabilities Long-term liabilities Capital $950,000 1.400,000 4,693,600 $7,055,600 $7,055,600 An unalysis of currentes discoses the following, Cash (restricted in the amount of 1296,000 for plant expansion) vestments inland Accounts receivable les allowance of 530,000 Inventories ( low asumption) $577,000 114,000 471,000 635,000 31,067.000 Otherwets Indudes Prepaid expenses Plant and equipment les accumulated depreciation of 1,478,000 Cash surrender values of insurance policy Un amortized bond discount Notes receivable short-term GO Land 562.000 4,129,000 30,000 39.600 100,000 256.000 450.000 Lario $5,188,600 Current liabilities include: Accounts payable Notes payable (due 2020) Estimated Income taxes payable Premium on common stock $501,000 159,000 145,000 149,000 $954,000 Long-term liabilities include: Unearned revenue Dividends payable (cash) 8% bonds payable (due May 1, 2022) $486,000 202,000 720,000 $1,400,000 Capital Includes: Retained earnings $2,823,600 Common stock, par value $10: authorized 200,000 shares, 187,000 shares issued 1,870,000 $4,693,600 1. On May 1, 2017, the corporation at 94.50, 720,000 of bonds to finance plant expansion. The long-term bend 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 2015, the ending inventory was overstated by $182,000. The ending inventories for 2016 and 2017 were correctly computed. (b) in 2017. accrued wages in the amount of $225,000 were omitted from the balance sheet, and there were not charged on the come statement () in 2017. again of $170,000 (netto) on the sale of curtain was edited directly to do 3. A major competitor has introduced a line of products that will compet directly with a primary line, www bene din designed new fant. Because of manufacturing innovation, the comitor will be of comparable quality but pred so below Sun and in the competitor and wine on January 1, 2018 Sunland indicates that the company will meet the lower prices that are high enough to cover antle manufacturing and independent permit recovery of only a portion of Hoxed cost 4. You leared on January 20, 2015, grior to consoletio of the otheavy damage cause of a recent fee too of us two plants, the loss will not be reimbursed by Insurance. The newspapers described the event in de December 31, 2017 Assets Current Assets Cash EL Accounts Recevable Less Allowance for Doubtful Accounts Notes Receivable Inventaries Prald Expenses lili II Total Current Assets Long term lovestments Castricted for an anon Calendar Insurance D 3 Your firm has been engaged to examine the financial statements of Sunland 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 SUNLAND CORPORATION BALANCE SHEET DECEMBER 31, 2017 Current assets Other as $1,367,000 5,188,600 Current liabilities Long-term liabilities Capital $950,000 1.400,000 4,693,600 $7,055,600 $7,055,600 An unalysis of currentes discoses the following, Cash (restricted in the amount of 1296,000 for plant expansion) vestments inland Accounts receivable les allowance of 530,000 Inventories ( low asumption) $577,000 114,000 471,000 635,000 31,067.000 Otherwets Indudes Prepaid expenses Plant and equipment les accumulated depreciation of 1,478,000 Cash surrender values of insurance policy Un amortized bond discount Notes receivable short-term GO Land 562.000 4,129,000 30,000 39.600 100,000 256.000 450.000 Lario $5,188,600 Current liabilities include: Accounts payable Notes payable (due 2020) Estimated Income taxes payable Premium on common stock $501,000 159,000 145,000 149,000 $954,000 Long-term liabilities include: Unearned revenue Dividends payable (cash) 8% bonds payable (due May 1, 2022) $486,000 202,000 720,000 $1,400,000 Capital Includes: Retained earnings $2,823,600 Common stock, par value $10: authorized 200,000 shares, 187,000 shares issued 1,870,000 $4,693,600 1. On May 1, 2017, the corporation at 94.50, 720,000 of bonds to finance plant expansion. The long-term bend 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 2015, the ending inventory was overstated by $182,000. The ending inventories for 2016 and 2017 were correctly computed. (b) in 2017. accrued wages in the amount of $225,000 were omitted from the balance sheet, and there were not charged on the come statement () in 2017. again of $170,000 (netto) on the sale of curtain was edited directly to do 3. A major competitor has introduced a line of products that will compet directly with a primary line, www bene din designed new fant. Because of manufacturing innovation, the comitor will be of comparable quality but pred so below Sun and in the competitor and wine on January 1, 2018 Sunland indicates that the company will meet the lower prices that are high enough to cover antle manufacturing and independent permit recovery of only a portion of Hoxed cost 4. You leared on January 20, 2015, grior to consoletio of the otheavy damage cause of a recent fee too of us two plants, the loss will not be reimbursed by Insurance. The newspapers described the event in de December 31, 2017 Assets Current Assets Cash EL Accounts Recevable Less Allowance for Doubtful Accounts Notes Receivable Inventaries Prald Expenses lili II Total Current Assets Long term lovestments Castricted for an anon Calendar Insurance D 3