Question

Balance Sheet

Below is the balance sheet for Labyrinth Services Co., which contains errors.

Labyrinth Services Co.
Balance Sheet
For the Year Ended August 31, 2018
Assets
Current assets:
Cash	$14,600
Accounts payable	24,800
Supplies	6,600
Prepaid insurance	11,900
Land	189,400
Total current assets		$247,300
Property, plant, and equipment:
Building	$396,400
Equipment	89,700
Total property, plant, and equipment		644,800
Total assets		$892,100
Liabilities
Current liabilities:
Accounts receivable	$33,200
Accumulated depreciation—building	163,200
Accumulated depreciation—equipment	26,500
Net income	141,900
Total liabilities		$364,800
Stockholders' Equity
Wages payable	$2,800
Common stock	150,000
Retained earnings	374,500
Total stockholders' equity		527,300
Total liabilities and stockholders' equity		$892,100

Prepare a corrected balance sheet.

Labyrinth Services Co.
Balance Sheet
August 31, 2018
Assets
Current assets:
Cash		$
Accounts receivable
Supplies
Prepaid insurance
Total current assets			$
Property, plant, and equipment:
Land		$
Building	$
Accumulated depreciation - building
Book value - building
Equipment	$
Accumulated depreciation - equipment
Book value - equipment
Total property, plant, and equipment
Total assets			$
Liabilities
Current liabilities:
Accounts payable		$
Wages payable
Total liabilities			$
Stockholders' Equity
Common stock		$
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity			$

Answer 1

Solution:

Corrected Balance sheet for Labyrinth Services Co. as on August 31, 2018

ASSETS		Amount $
Current assets:
Cash	14,600
Accounts receivable	33,200
Supplies	6,600
Prepaid insurance	11,900
Total current assets:	66,300
Non current assets:
Property, plant and equipment:
Land	189,400
Building	396,400
Less: Accumulated depreciation on buildings	- 163,200
Book value building:	233,200
Equipment	89,700
Less: Accumulated depreciation on equipment	- 26,500
Book value equipment:	63,200
Total property, plant and equipment	485,800
TOTAL ASSETS:		$552,100
LIABILITIES
Current liabilities:
Accounts payable	24,800
Wages payable	2,800
Total current liabilities:	27,600
STOCKHOLDER'S EQUITY:
Common stock	150,000
Retained earnings	374,500
Total stockholder's equity:	524,500
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY:		$552,100