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	$20,000
Accounts payable	31,400
Supplies	9,100
Prepaid insurance	16,300
Land	237,000
Total current assets		$313,800
Property, plant, and equipment:
Building	$495,700
Equipment	112,200
Total property, plant, and equipment		815,400
Total assets		$1,129,200
Liabilities
Current liabilities:
Accounts receivable	$45,400
Accumulated depreciation—building	204,100
Accumulated depreciation—equipment	33,200
Net income	179,500
Total liabilities		$462,200
Stockholders' Equity
Wages payable	$3,500
Common stock	150,000
Retained earnings	513,500
Total stockholders' equity		667,000
Total liabilities and stockholders' equity		$1,129,200

Prepare a corrected balance sheet.

Labyrinth Services Co.
Balance Sheet
August 31, 2018
Assets
Current assets:
		$
Total current assets			$
Property, plant, and equipment:
		$
	$
	$
Total property, plant, and equipment
Total assets			$
Liabilities
Current liabilities:
		$
Total liabilities			$
Stockholders' Equity
		$
Total stockholders' equity
Total liabilities and stockholders' equity			$

Answer 1

Answer:

Labyrinth Services Co                   Balance Sheet                   For the year ended Aug 31, 2018
Particulars	Amount ($)	Amount ($)
Assets :
Current Assets:
Cash	20,000
Supplies	9,100
Prepaid Insurace	16,300
Accounts Receivable (Note:3)	45,400
Total Current Assets		90,800
Non Current Assets:
Land  (Note:2)		237,000
Building	495,700
Less: Accumulated Depreciation - building (Note:4)	(204,100)	291,600
Equipment	112,200
Less: Accumulated Depreciation - equipment  (Note:4)	(33,200)	79,000
Total Non Current Assets		607,600
Total Assets		698,400
Liabilities & Equity:
Current Liabilities:
Accounts Payable (Note:1)	31,400
Wages Payable	3,500
Total Current Liabilities		34,900
Owner's Equity
Common stock	150,000
Retained earnings	513,500
Total Owner's Equity		663,500
Total Owner's Equity & Liabilities		698,400

Notes:                                              
1   Accounts Payable should be a part of current liabilities & not current assets                              
2   Land is always part of non-current assets considering it a long term investment in business                          
3   Accounts receivable are an asset for the business                                      
4   Accumulated depreciation is shown as a reduction from the gross value of Building & Equipment. Alternatively, it can be presented on the liabilities side as well.
5   Net income has been assumed to be already included in the "capital".