The bookkeeper for Chordwise Music, Inc., reports the following balance sheet amounts as of June 30, 2011.

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $295,300

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630,600

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,420

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000

Owners’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 558,480

A review of account balances reveals the following data.

(a) An analysis of current assets discloses the following:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 59,500

Investment securities—trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,300

Inventories, including advertising supplies of $3,500 . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,500

$295,300

(b) Other assets include the following:

Property, plant, and equipment:

Depreciated book value (cost, $775,000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$554,500

Deposit with a supplier for merchandise ordered for August delivery . . . . . . . . . . . . . . . 10,700

Goodwill recorded on the books to cancel losses incurred by the company in prior years ... 65,400

$630,600

(c) Current liabilities include the following:

Payroll payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 12,550

Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,870

Rent payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,700

Accounts payable

Total owed to suppliers on account . . . . . . . . . . . . . . . . . . . . . . . . . . $111,300

Less: 6-month note received from a supplier who purchased

some used equipment on June 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . 5,000 106,300

Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000

$167,420

(d) Other liabilities include the following:

10% mortgage on property, plant, and equipment, payable in semiannual

installments of $20,000 through June 30, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000

(e) Owners’ equity includes the following:

Preferred stock: 15,000 shares outstanding ($20 par value) . . . . . . . . . . . . . . . . . . . . . $300,000

Common stock: 175,000 shares at $1 stated value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000

Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,480

$558,480

(f) Common shares were originally issued for $495,000, but the losses of the company for the past years were charged against additional paid-in capital. Instructions: Using the account balances and related data, prepare a corrected balance sheet showing individual asset, liability, and owners’ equity balances properlyclassified.