Hly Rired you because they're aware that you're familiar with financial statements and what should be included in them. Before issuing their Balance Sheet, they've asked you to review the statement and identify any errors. List 2 errors you see in the statement below. Assets Liabilities Current assets: Current liabilities: Cash $ 7,170 Accounts receivable $10,000 Accounts payable 7,500 Accum. depr.-building 12,525 Supplies 2,590 Accum. depr.-equipment 7,340 Prepaid insurance 800 Net income 11,500 Land 24,000 Total current assets $ 42,060 Total liabilities $41,365 Stockholders' Equity $ 1,500 Property, plant, and equipment: Wages payable Building $43,700 Common stock 86,645 Equipment 29,250 Retained earnings 2,000 Total stockholders' equity Total property, plant, and equipment 72.950 90,145 Total liabilities and stockholders' equity $131.510 $131.510 Total assets


Working notes:
Correct Balance sheet |
||||
Assets |
|
|
Liabilities |
|
Current Assets |
|
Current Liabilities |
|
|
Cash |
|
7,170 |
Accounts Payable |
7,500 |
Accounts Receivable |
|
10,000 |
Wages Payable |
1,500 |
Supplies |
|
2,590 |
|
|
Prepaid insurance |
|
800 |
|
|
Total current Assets |
|
20,560 |
Total Liabilities |
9,000 |
|
|
|
|
|
Property, Plant and Equipment |
|
|
|
|
Land |
|
24,000 |
|
|
|
|
|
|
|
Building |
43,700 |
|
|
|
Less: Accumulated Depreciation - Buildings |
(12,525) |
31,175 |
|
|
|
|
Stock Holder Equity |
|
|
Equipment |
29,250 |
Common Stock |
86,645 |
|
Less: Accumulated Depreciation - Equipment |
(7,340) |
21,910 |
Retained earnings |
2,000 |
|
|
77,085 |
|
88,645 |
|
|
|
|
|
Total Assets |
|
97,645 |
Total stockholders' Equity |
97,645 |
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