(Preparation of a Corrected Balance Sheet) Uhura Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.

UHURA Company
Balance Sheet
For the year ended 2017
Current assets
Cash	\(230,000
Accounts receivables (Net)	340,000
Inventory (Lower of average cost or market)	401,000
Equity investment (Trading)	140,000
Property, Plant and Equipment
Building (net)	570,000
Equipment (net)	160,000
Land held for future use	175,000
Intangible assets
Goodwill	80,000
Cash surrender value of life insurance	90,000
Prepaid expenses	12,000
Current liabilities
Account payable	135,000
Note payable	125,000
Pension obligation	82,000
Rent payable	49,000
Premium on bond payable	53,000
Long-term Liabilities
Bond payable	500,000
Stockholders equity
Common stock \)1 par, authorized 400,000 shares, issued 290,000	290,000
Additional paid in capital	160,000
Retained earnings

Instructions

Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is \(160,000 and for the equipment, \)105,000. The allowance for doubtful accounts has a balance of $17,000. The pension obligation is considered a long-term liability.

Step by step solution

01

Definition of Pension

The steady income received by a retired individual from the plan is known as a pension. The individual contributes a part of their salary during their working life to receive this amount after retirement.

02

Classified Balance sheet

UHURA Company
Balance Sheet
For the year ended 2017
Current assets
Cash		$230,000
Accounts receivables	$357,000	340,000
Less: allowance for doubtful accounts	(17,000)
Inventory (Lower of average cost or market)		401,000
Equity investment (Trading)		140,000
Prepaid expenses		12,000
Cash surrender value of life insurance		90,000
Investment
Land held for future use		175,000
Property, Plant and Equipment
Building	730,000	570,000
Less: Accumulated depreciation – building	(160,000)
Equipment	265,000	160,000
Less: Accumulated depreciation - equipment	(105,000)
Intangible assets
Goodwill		80,000
Total assets		1,821,000
Current liabilities
Account payable		135,000
Note payable		125,000
Rent payable		49,000
Long-term Liabilities
Bond payable		500,000
Premium on bond payable		53,000
Pension obligation		82,000
Total liabilities		944,000
Stockholders equity
Common stock $1 par, authorized 400,000 shares, issued 290,000		290,000
Additional paid-in capital		160,000
Retained earnings		427,000
Total liabilities and stockholder’s equity		$1,821,000

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