The Cutler Corporation prepared the following balance sheet:

Required
1. Identify the errors made in the Cutler balance sheet.
2. Prepare a corrected, properly classified balancesheet.

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CUTLER CORPORATION Balance Report For Year Ended December 31, 2007 Current Assets Current Liabilities 6,300 Accounts payable Accumulated depreciation: buildings Wages payable Additional paid.in capital $13,000 17,100 Accounts receivable 15,900 28,000 1,400 7,300 Inventory, at higher of cost or market (cost $27,200) Long-Term Investments on common stock 23,200 Treasury stock (at cost) Investment in D Company bonds Long-Term Liabilities Bonds payable Less: Sinking fund to retire $46,000 (6,000 40,000 Preferred stock, $50 par Premium on preferred stock Accumulated depreciation: equipment Current taxes payable short-term at market value 15,000 S,100 7,000 9,600 10,000 Property, Plant, and Equipment Land Patents 11,300 Less: Accumulated amortization 2.800) 5,200 Owners Equity Buildings Equipment 40,800 19,000 Common stock, $2 par Unrealized gain on write-up 8,000 Intangibles of marketable securities to market value 5,700 Other Assets Unrealized gain on write-up Cash surrender value of life insurance Discount on bonds payable 5,000 of inventory to market value Retained earnings 16,000 Total Assets 159,800 Allowance for doubtful accounts