Account balances and supplemental information for the Kelly Corporation as of December 31, 2017

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Account balances and supplemental information for the Kelly Corporation as of December 31, 2017, are given below:

Accounts Payable …………………………………

$ 75,900

Accounts Receivable ………………………………

141,600

Accumulated Depreciation–Equipment ………………..

84,000

Bonds Payable ……………………………………

300,000

Cash ……………………………………………

243,900

Common Stock …………………………………….

1,560,000

Deferred Income Tax Liability (noncurrent) ………….

6,900

Dividends Payable ………………………………..

45,000

Equipment ……………………………………….

840,000

Income Taxes Payable ……………………………..

91,500

Inventory ……………………………………….

395,100

Investment in Land ……………………………….

510,000

Investment in Stock of Subsidiary ………………….

492,000

Note Payable …………………………………….

120,000

Notes Receivable …………………………………

150,000

Prepaid Insurance ………………………………..

7,200

Retained Earnings ………………………………..

453,600

Salaries and Wages Payable ………………………..

42,900

(a)

$300,000 of 12% bonds were issued on December 31, 2017, at par.

(b)

40,000 shares of $30 par value common stock were sold for $1,560,000.

(c)

All the equipment was purchased on January 2, 2016. The depreciation rate is 10 percent per year.

(d)

5 percent of accounts receivable are expected to be uncollectible.

(e)

A two-year insurance policy was purchased on May 1, 2017, for $7,200.

(f)

Accrued interest on $150,000 of short-term notes receivable from customers was $5,100 at December 31, 2017.

(g)

$120,000 was borrowed from the bank on a 5-year, 10% note payable dated July 1, 2017. The loan is to be repaid at the end of 5 years. Interest is payable each year on July 1.

Required:

Prepare a properly classified balance sheet in proper form for Kelly Corporation as of December 31, 2017. NOTE: the above items a-g need to be considered and any adjustments need to be made to the balance sheet accounts and any related income statement effects should be adjusted to the retained earnings account.

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