List the corrections undeniable to present in good form the balance woodworking plane below. Errors include misclassifications, lack of adequate disclosure, and poor terminology. Do non concern yourself with the arithmetic. If an item can be classified in more than one category, select the category most upgrade by the authors of your textbook.
List the item that is incorrect and how it should be shown. enjoy do not try to restate the balance sheet.
westside Corporation
Balance Sheet
For the year ended December 31, 2010
Assets
Current Assets:
specie$ 18,000
Trading securities ( decorous time value, $32,000)27,000
Trading securities should be reported at the fair value
Accounts receivable75,000
Merchandise enrolment60,000
Must note inventory costing method used
Supplies inventory3,000
This is actually a Supplies on Hand or Prepaid Expense and is listed last nether Current Assets
Stock investment in subsidiary federation 60,000$243,000
Stock investments would be a farseeing-term investment below non-current assets
Long Term Investments:
Treasury stock78,000
This should be listed chthonic Owners Equity as a reduction
tactual Fixed Assets: Should be Property, Plant, and Equipment
Buildings and land213,000
Less: Reserve for dispraise 60,000153,000
Reserve should be Accumulated Depreciation - Buildings
Deferred Charges:
Unamortized discount on bonds payable3,000
This is a contra-liability account and needs to be locomote to long term liabilities
Other Assets:
Cash surrender value of life insurance 54,000
Cash surrender is a long term investment$531,000
Liabilities and Capital
Current Liabilities:
Accounts payable$ 45,000
Reserve for income taxes42,000
Income Taxes due; listed correctly as a current liability
Customers accounts with credit balances 3$ 87,003
This would be Unearned Revenue and is classified correctly as a current liability
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