Project_I_AC 550 - Problem A-IV Balance Sheet Form List the...

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Problem A-IV — Balance Sheet Form. List the corrections needed to present in good form the balance sheet below. Errors include misclassifications, lack of adequate disclosure, and poor terminology. Do not concern yourself with the arithmetic. If an item can be classified in more than one category, select the category most favored by the authors of your textbook. List the item that is incorrect and how it should be shown. Please do not try to restate the balance sheet. West Corporation Balance Sheet December 31, 2010 Assets Current Assets: Cash $ 18,000 Trading securities ( fair value, $32,000) 27,000 Accounts receivable 75,000 Merchandise inventory 60,000 Supplies inventory 3,000 Stock investment in subsidiary company 60,000 $243,000 Investments: Treasury stock 78,000 Tangible Fixed Assets: Buildings and land 213,000 Less: Reserve for depreciation 60,000 153,000 Deferred Charges: Unamortized discount on bonds payable 3,000 Other Assets: Cash surrender value of life insurance 54,000 $531,000 Liabilities and Capital Current Liabilities: Accounts payable $ 45,000 Reserve for income taxes 42,000
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