Balance Sheet Adjustment and Preparation

Presented below is the adjusted trial balance of Bailey Corporation at December 31, 2008.
Debits Credits
Cash $52,000
Accounts Receivable 173,000
Allowance for Doubtful Accounts 10,400
Prepaid Insurance 6,300
Inventory 319,300
Long-term Investments 345,000
Land 105,000
Construction Work in Progress 136,000
Patents 36,000
Equipment 380,000
Accumulated Depreciation - Equipment 165,000
Unamortized Discount on Bonds Payable 20,000
Accounts Payable 152,200
Accrued Expenses 52,000
Notes Payable 100,000
Bonds Payable 400,000
Common Stock 500,000
Premium on Common Stock 50,000
Retained Earnings 143,000
Total $1,572,600 $1,572,600

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 and bonds is the same.
3. The amount of the Construction Work 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 $105,000, 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 unamortized discount on bonds payable, $2,000 will be amortized in 2009.
6. The notes payable represent bank loans that are secured by long-term investments carried at $120,000. These bank loans are due in 2009.
7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2018.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding.