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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Corrections to Balance Sheet Minett Boatbuilders Company prepared the following balance sheet:

Chapter 4, Problem 3P, Corrections to Balance Sheet Minett Boatbuilders Company prepared the following balance sheet: , example  1

Chapter 4, Problem 3P, Corrections to Balance Sheet Minett Boatbuilders Company prepared the following balance sheet: , example  2

Required:

Based on your analysis, prepare a properly classified December 31, 2019, balance sheet for Minett Boatbuilders.

To determine

Prepare classified balance sheet for Company M as on December 31, 2019.

Explanation

Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholders’ equity) over those resources, on a specific date. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and stockholders’ equity.

Classified balance sheet of Company M is prepared as follows:

Company M
Classified Balance Sheet
December 31,2019
   
AssetsAmount ($)Amount ($)Amount ($)
Current Assets:   
Cash 12,300 
Investments in marketable securities 17,000 
Accounts receivable18,000  
Less: Allowance for doubtful accounts(1,400)16,600 
Inventories 32,000 
Prepaid items:   
Insurance 2,400 
Office supplies 3,500 
Total current assets  83,800
Long-term investments:   
Investments in available-for-sale securities  29,000
Property, plant and equipment   
Land 12,000 
Building and equipment100,000  
Less: Accumulated depreciation(40,000)60,000 
Total property, plant and equipment  72,000
Total assets  184,800
    
Liabilities ...

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