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classified balance sheet lane peterson incorporated his concrete manufacturing opera 691793

Classified Balance Sheet

Lane Peterson incorporated his concrete manufacturing operations on January 1, 2008, by issuing 10,000 shares of $1 par common stock to himself. The following balance sheet for the new corporation was prepared.

Outrigger Corporation

Balance Sheet

January 1, 2008

Cash

$ 10,000

Accounts receivable

75,000

Inventory

85,000

Equipment

125,000

Total

 $295,000

Accounts payable—suppliers

$ 45,000

Capital stock, $1 par

10,000

Additional paid in capital

240,000

Total

$295,000

During 2008, Outrigger Corporation engaged in the following transactions.

(a) Outrigger Corporation produced concrete costing $320,000.Concrete costs consisted of the following: $220,000, raw materials purchased; $45,000, labor; and $55,000, overhead. Outrigger Corporation paid the $45,000 owed to suppliers as of January 1 and $150,000 of the $220,000 of raw materials purchased during the year. All labor, except for $4,500, and recorded overhead were paid in cash during the year. Other operating expenses of $18,000 were incurred and paid in 2008.

(b) Concrete costing $280,000 was sold during 2008 for $360,000. All sales were made on credit, and collections on receivables were $325,000.

(c) Outrigger Corporation purchased machinery (fair market value = $210,000) by trading in old equipment costing $80,000 and paying $130,000 in cash. There is no accumulated depreciation on the old equipment as it was revalued when the new corporation was formed.

(d) Outrigger Corporation issued an additional 5,000 shares of common stock for $25 per share and declared a dividend of $2.50 per share to all stockholders of record as of December 31, 2008, payable on January 15, 2009.

(e) Depreciation expense for 2008 was $32,000. The allowance for bad debts after yearend adjustments is $1,500.

Instructions: Prepare a properly classified balance sheet in account form for Outrigger Corporation as of December 31, 2008.

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