Presented below is the balance sheet of Sargent Corporation for the current year, 2014

E5-5 Sargent Corporation

P5-5 (Balance Sheet Adjustment and Preparation)

Presented below is the balance sheet of Sargent Corporation for the current year, 2014.

The following information is presented.

1 The current assets section includes cash $150,000, accounts receivable $170,000 less $10,000 for allowance for doubtful accounts, inventories $180,000, and unearned rent revenue $5,000. Inventoy is stated on the lower-of-FIFO-cost-or-market.

2. The investments section includes the cash surrender value of a life insurance contract $40,000; investments in common stock, short-term (trading) $80,000 and long-term (available-for-sale) $270,000; and bond sinking fund $250,000. The cost and fair value of investments in common stock are the same.

3. Property, plant, and equipment includes buildings $1,040,000 less accumulated depreciation $360,000; equipment $450,000 less accumulated depreciation $180,000; land $500,000; and land held for future use $270,000.

4. Intangible assets include a franchise $165,000; goodwill $100,000; and discount on bonds payable $40,000.

5. Current liabilities include accounts payable $140,000; notes payable—short-term $80,000 and long-term $120,000; and income taxes payable $40,000.

6. Long-term liabilities are composed solely of 7% bonds payable due 2022.

7. Stockholders' equity has preferred stock, no par value, authorized 200,000 shares, issued 70,000 shares for $450,000; and common stock, $1.00 par value, authorized 400,000 shares, issued 100,000 shares at an average price of $10. In addition, the corporation has retained earnings of $320,000.

Instructions

Prepare a balance sheet in good form, adjusting the amounts in each balance sheet classification as affected by the information given above.