Problem 5-5 Presented below is the balance sheet of Sargent Corporation for the current year, 2017.

Problem 5-5

Presented below is the balance sheet of Sargent Corporation for the current year, 2017.

MARTINEZ CORPORATION
BALANCE SHEET
DECEMBER 31, 2017

Current assets $  488,840 Current liabilities $  383,840
Investments 643,840 Long-term liabilities 1,003,840
Property, plant, and equipment 1,723,840 Stockholders’ equity 1,773,840
Intangible assets 305,000 $3,161,520
$3,161,520
The following information is presented.

1. The current assets section includes cash $153,840, accounts receivable $173,840 less $13,840 for allowance for doubtful accounts, inventories $183,840, and unearned rent revenue $8,840. Inventory is stated on the lower-of-FIFO-cost-or-market.
2. The investments section includes the cash surrender value of a life insurance contract $43,840; investments in common stock, short-term $83,840 and long-term $273,840; and bond sinking fund $242,320. The cost and fair value of investments in common stock are the same.
3. Property, plant, and equipment includes buildings $1,043,840 less accumulated depreciation $363,840, equipment $453,840 less accumulated depreciation $183,840, land $503,840, and land held for future use $270,000.
4. Intangible assets include a franchise $168,840, goodwill $103,840, and discount on bonds payable $32,320.
5. Current liabilities include accounts payable $143,840, notes payable-short-term $83,840 and long-term $123,840, and income taxes payable $32,320.
6. Long-term liabilities are composed solely of 7% bonds payable due 2025.
7. Stockholders’ equity has preferred stock, no par value, authorized 200,000 shares, issued 73,840 shares for $443,040, and common stock, $1.00 par value, authorized 400,000 shares, issued 103,840 shares at an average price of $10. In addition, the corporation has retained earnings of $292,400.

Prepare a balance sheet in good form, adjusting the amounts in each balance sheet classification as affected by the information given above. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)

balance sheet

-Assets

-Liabilities and stockholders' equity

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