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repare a classified balance sheet in good form. Common stock authorized was $400,000$ shares, and preferred stock authorized was $20,000$ shares. Assume that notes receivable and notes payable are short$-$term, unless stated otherwise. Cost and fair value of debt investments $($trading$)$ are the same.

P$5\mathrm{.}3($LO $2)($Balance Sheet Adjustment and Preparation$)$ The adjusted trial balance of Eastwood Company and other related information for the year $2020$ are presented as follows.

Eastwood Company

Adjusted Trial Balance

December $31,2020$

$$

Debit

$$

Credit

Cash

$$41,000$

Accounts Receivable

$163,500$

Allowance for Doubtful Accounts

$$8,700$

Prepaid Insurance

$5,900$

Inventory

$208,500$

Equity Investments $($long$-$term$)$

$339,000$

Land

$85,000$

Construction in Process $($building$)$

$124,000$

Patents

$36,000$

Equipment

$400,000$

Accumulated Depreciation$$Equipment

$240,000$

Discount on Bonds Payable

$20,000$

Accounts Payable

$148,000$

Accrued Liabilities

$49,200$

Notes Payable

$94,000$

Bonds Payable

$200,000$

Common Stock

$500,000$

Paid$-$in Capital in Excess of Par$$Common Stock

$45,000$

Retained Earnings $$

$138,000$

$$

$$1,422,900$

$$

$$1,422,900$

Additional information:

$1.$The LIFO method of inventory value is used.

$2.$The cost and fair value of the long$-$term investments that consist of stocks $($with ownership less than $20\%$ of total shares$)$ are the same.

$3.$The amount of the Construction in Progress account represents the costs expended to date on a building in the process of construction. $($The company rents factory space at the present time.$)$ The land on which the building is being constructed cost $$85,000,$ as shown in the trial balance.

$4.$The patents were purchased by the company at a cost of $$40,000$ and are being amortized on a straight$-$line basis.

$5.$Of the discount on bonds payable, $$2,000$ will be amortized in $2021.$

$6.$The notes payable represent bank loans that are secured by long$-$term investments carried at $$120,000.$ These bank loans are due in $2021.$

$7.$The bonds payable bear interest at $8\%$ payable every December $31,$ and are due January $1,2031.$

$8.600,000$ shares of common stock of a par value of $$1$ were authorized, of which $500,000$ shares were issued and outstanding.

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