Chapter 3, Problem 3.9P

Balance sheet preparation

• LO3–2 , LO3–3

Presented below is the balance sheet for HHD, Inc., at December 31, 2018.

The captions shown in the summarized statement above include the following:

a. Current assets: cash, $150,000; accounts receivable, $200,000; inventories, $225,000; and prepaid insurance, $25,000.

b. Investments: investments in common stock, short term, $90,000, and long term, $160,000; and restricted cash, long term, $250,000.

c. Property, plant, and equipment: buildings, $1,500,000 less accumulated depreciation, $600,000; equipment, $500,000 less accumulated depreciation, $200,000; and land, $800,000.

d. Intangible assets: patent, $110,000; and copyright, $90,000.

e. Current liabilities: accounts payable, $100,000; notes payable, short term, $150,000, and long term, $90,000; and taxes payable, $60,000.

f. Long-term liabilities: bonds payable due 2023.

g. Shareholders’ equity: common stock, $1,000,000; retained earnings, $800,000. Five hundred thousand shares of no par common stock are authorized, of which 200,000 shares were issued and are outstanding.

Required:

Prepare a corrected classified balance sheet for HHD, Inc., at December 31, 2018.