Chapter 4, Problem 4.13EX

Balance sheet

List the errors you find in the following balance sheet. Prepare a corrected balance sheet.

Labyrinth Services Co. Balance Sheet For the Year Ended August 31, 2018
Assets
Current assets:
Cash................................................................	$ 18,500
Accounts payable....................................................	31,300
Supplies............................................................	6,500
Prepaid insurance...................................................	16,600
Land................................................................	225,000
Total current assets................................................		$297,900
Property, plant, and equipment:
Building.............................................................	$400,000
Equipment..........................................................	97,000
Total property, plant, and equipment................................		635,400
Total assets............................................................		$933,300
Liabilities
Current liabilities:
Accounts receivable..................................................	$ 41,400
Accumulated depreciation—building..................................	155,000
Accumulated depreciation—equipment...................................	25,000
Net income..........................................................	118,200
Total liabilities.........................................................		$339,600
Stockholders’ Equity
Wages payable........................................................	$ 6,500
Common stock.........................................................	75,000
Retained earnings......................................................	512,200
Total stockholders’ equity...............................................		593700
Total liabilities and stockholders’ equity..................................		$933,300