prepare a corrected properly classified balance sheet 562993

Erroneous Balance Sheet The Cutler Corporation prepared the following balance sheet:

CUTLER CORPORATION
Balance Report For Year Ended December 31, 2007

Current Assets

Current Liabilities

Cash

$6,300

Accounts payable

$13,000

Accounts receivable

15,900

Accumulated depreciation: buildings

17,100

Inventory, at higher of cost or market (cost $27,200)

28,000

Wages payable

3,000

Long Term Investments

Additional paid in capital on common stock

23,200

Treasury stock (at cost)

1,400

Long Term Liabilities

Investment in D Company bonds (at book value)

7,300

Bonds payable

$46,000

Marketable securities, short term at market value

10,000

Less: Sinking fund to retire bonds

6,000

40,000

Property, Plant, and Equipment

Preferred stock, $50 par

15,000

Land

Premium on preferred stock

5,100

Patents

$8,000

Accumulated depreciation: equipment

7,000

Less: Accumulated amortization

2,800

5,200

Current taxes payable

9,600

Buildings

40,800

Owners’ Equity:

Equipment

19,000

Common stock, $2 par

8,000

Intangibles

Unrealized gain on write up of marketable securities to market value

1,300

Trademarks

5,700

Unrealized gain on write up of marketable securities to market value

800

Other Assets

Retained earnings

16,000

Cash surrender value of life insurance

5,000

Allowance for doubtful accounts

700

Discount on bonds payable

3,900

Total Equities

$159,800

Total Assets

$159,800

Required

1. Identify the errors made in the Cutler balance sheet.

2. Prepare a corrected, properly classified balance sheet.

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