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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

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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lewis Music recently hired 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 S 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 $131.510 stockholders' equity $131.510 Total assets
Transcribed Image Text:Lewis Music recently hired 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 S 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 $131.510 stockholders' equity $131.510 Total assets
Expert Solution
Step 1

 

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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