The company's most recent balance sheet given below. The business uses the straight-line depreciation method, by which an equal amount of depreciation is allocated to each year of a fixed asset's estimated useful life. If the business had used accelerated depreciation for its fixed assets instead, the balance in the accumulated depreciation account would be $2,100,000. How would its balance sheet be different if the business had used accelerated depreciation? (Ignore income tax effects in your answer.)
|
Assets
|
Liabilities & Owners' Equity
|
|
Cash
|
$1,500,000
|
Accounts Payable
|
$700,000
|
|
Accounts Receivable
|
$1,000,000
|
Accrued Expenses Payable
|
$600,000
|
|
Inventory
|
$1,800,000
|
Short-term Notes Payable
|
$1,500,000
|
|
Prepaid Expenses
|
$300,000
|
Total Current Liabilities
|
$2,800,000
|
|
Total Current Assets
|
$4,600,000
|
Long-term Notes Payable
|
$2,000,000
|
|
Property, Plant, & Equipment
|
$4,800,000
|
Owners Equity:
|
|
|
Accumulated Depreciation
|
($1,400,000)
|
Capital Stock (10,000 shares)
|
$1,000,000
|
|
Cost Less Depreciation
|
$3,400,000
|
Retained Earnings
|
$2,200,000
|
|
Total Assets
|
$8,000,000
|
Total Owners' Equity
|
$3,200,000
|
| |
|
Total Liabilities & Owners' Equity
|
$8,000,000
|