Project 1 - Cash surrender value of life insurance would...

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Problem A-IV The title is incorrect because balance sheets are only effective the day of. Instead of stating for the year ended it should have the date. Trading securities should be listed at the fair value of $32,000 not $27,000. Allowance for doubtful accounts should be listed and deducted from accounts receivable. Inventory costing method and the way the price of the inventory is determined is not listed and should be in the notes. Stock investment would be listed under investments, not current assets. Treasury stock is a deduction under capital and does not belong in assets. Instead of tangible fixed assets, the heading should be Property, plant, and equipment. Building and land need to be separated out into 2 amounts. Reserve for depreciation should be Accumulated depreciation. Unamortized discount on bounds should be listed in liabilities and subtracted from bonds payable.
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Unformatted text preview: Cash surrender value of life insurance would also go under investments. Reserve for income taxes should be titled income taxes payable. Customer accounts with a credit balance can be deducted from accounts receivable. Such a small amount can be done behind the scene and does not need to be on the balance sheet. Bonds payable could be listed as current if they are due within the year; otherwise this is correct in long term liabilities. Capital stock should not be the heading under liabilities it should be Stockholders Equity. Capital stock does not state if preferred or common stock, the par value price, the number authorized and the number of shares issued. Earned surplus should be replaced with retained earnings. Cash dividends declared should be replaced with dividends payable and listed under current liabilities....
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This note was uploaded on 01/13/2011 for the course ACT Ac 551 taught by Professor George during the Spring '10 term at DeVry Chicago.

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