The balance sheet of Kishwaukee Corporation as of December 31, 2020, is as follows. Kishwaukee CorporationBalance SheetDecember 31, 2020 Assets Goodwill (Note 2) $ 120,000 Buildings (Note 1) 1,640,000 Inventory 312,100 Land 950,000 Accounts receivable 170,000 Treasury stock (50,000 shares) 87,000 Cash on hand 175,900 Assets allocated to trustee for plant expansion Cash in bank 70,000 Debt investments (held-to-maturity) 138,000 $3,663,000 Equities Notes payable (Note 3) $ 600,000 Common stock, authorized and issued, 1,000,000 shares, no par 1,150,000 Retained earnings 803,000 Noncontrolling interest 55,000 Appreciation capital (Note 1) 570,000 Income taxes payable 75,000 Reserve for depreciation recorded to date on the building 410,000 $3,663,000 Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value.The excess of appraisal value over cost was $570,000. Depreciation has been recorded based on cost. Note 2: Goodwill in the amount of $120,000 was recognized because the company believedthat book value was not an accurate representation of the fair value of the company. The gain of$120,000 was credited to Retained Earnings. Note 3: Notes payable are long-term except for the current installment due of $100,000. Instructions Prepare a corrected classified balance sheet in good form. The notes above are for information only.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The balance sheet of Kishwaukee Corporation as of December 31, 2020, is as follows.

Kishwaukee Corporation Balance Sheet December 31, 2020
Assets
Goodwill (Note 2)	$ 120,000
Buildings (Note 1)	1,640,000
Inventory	312,100
Land	950,000
Accounts receivable	170,000
Treasury stock (50,000 shares)	87,000
Cash on hand	175,900
Assets allocated to trustee for plant expansion
Cash in bank	70,000
Debt investments (held-to-maturity)	138,000
	$3,663,000
Equities
Notes payable (Note 3)	$ 600,000
Common stock, authorized and issued, 1,000,000 shares, no par	1,150,000
Retained earnings	803,000
Noncontrolling interest	55,000
Appreciation capital (Note 1)	570,000
Income taxes payable	75,000
Reserve for depreciation recorded to date on the building	410,000
	$3,663,000
Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was $570,000. Depreciation has been recorded based on cost. Note 2: Goodwill in the amount of $120,000 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. The gain of $120,000 was credited to Retained Earnings. Note 3: Notes payable are long-term except for the current installment due of $100,000.

Instructions

Prepare a corrected classified balance sheet in good form. The notes above are for information only.

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