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Whispering Company has decided to expand its operations. The bookkeeper recently completed the following balance sheet...

Whispering Company has decided to expand its operations. The bookkeeper recently completed the following balance sheet in order to obtain additional funds for expansion.

WHISPERING COMPANY
BALANCE SHEET
FOR THE YEAR ENDED 2020

Current assets
  Cash $239,000
  Accounts receivable (net) 349,000
  Inventory (lower-of-average-cost-or-market) 410,000
  Equity investments (marketable)-at cost (fair value $129,000) 149,000
Property, plant, and equipment
  Buildings (net) 579,000
  Equipment (net) 169,000
  Land held for future use 184,000
Intangible assets
  Goodwill 89,000
  Cash surrender value of life insurance 99,000
  Prepaid expenses 21,000
Current liabilities
  Accounts payable 144,000
  Notes payable (due next year) 134,000
  Pension obligation 91,000
  Rent payable 58,000
  Premium on bonds payable 62,000
Long-term liabilities
  Bonds payable 509,000
Stockholders’ equity
  Common stock, $1.00 par, authorized 400,000 shares, issued 299,000 299,000
  Additional paid-in capital 169,000
  Retained earnings ?


Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $169,000 and for the equipment, $114,000. The allowance for doubtful accounts has a balance of $26,000. The pension obligation is considered a long-term liability. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Buildings and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)

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Expert Solution

Whispering Company Balance Sheet December 31,2020

Assets:
Current Assets;
Cash $239,000
Equity Investment $129,000
Accounts Receivable $375,000
(-)Allowance for Doubtful $26,000 $349,000
Inventory $410,000
Prepaid Expenses $21,000
Total Current Assets $1,148,000
Long Term Investment;
Land $184,000
Cash Surrendered $99,000
Total long term investment $283,000
Property Plant and Equipment;
Building $748,000
Less: Accumulated Depreciation $169,000 $579,000
Equipment $283,000
Less: Accumulated Depreciation $114,000 $169,000
Total Property Plant &Equipment $748,000
Intangible assets;
Good Will $89,000
Total Assets $2,268,000
Liabilities and Stockholders Equity;
Current Liabilities;
Accounts Payable $144,000
Notes Payable $134,000
Rent Payable $58,000
Total Current Liabilities $336,000
Long Term Liabilities;
Bonds Payable $509,000
Add: Premium on Bond $62,000 $571,000
Pension obligation $91,000 $662,000
Total Liabilities $998,000
Stockholders Equity;
Common Stock $299,000
Additional Paid in Capital $169,000 $468,000
Retained Earnings * $802,000
Total Stockholders Equity $1,270,000
Total Liabilities & Stockholders Equity $2,268,000

* Retained Earnings =$2,268,000 - $998,000-$468,000=$802,000


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