In: Accounting
Assets | ||
Current assets: | ||
Cash | $7,170 | |
Accounts payable | 7,500 | |
Supplies | 2,590 | |
Prepaid insurance | 800 | |
Land | 24,000 | |
Total current assets | $42,060 | |
Property, plant, and equipment: | ||
Building | $43,700 | |
Equipment | 29,250 | |
Total property, plant, and equipment | 72,950 | |
Total assets | $131,510 | |
Liabilities | ||
Current liabilities: | ||
Accounts receivable | $10,000 | |
Accum. depr.-building | 12,525 | |
Accum. depr.-equipment | 7,340 | |
Net income | 11,500 | |
Total liabilities | $41,365 | |
Owner's Equity | ||
Wages payable | $1,500 | |
Mark Brock, capital | 88,645 | |
Total owner's equity | 90,145 | |
Total liabilities and owner's equity | $131,510 |
a. List the errors in the balance sheet.
(1) Date of statement .
(2) Accounts payable .
(3) Land and .
(4) Accumulated depreciation from the related fixed asset in the
Property, Plant, and Equipment section.
(5) The amount of total assets .
(6) Accounts receivable .
(7) Net income .
(8) Wages payable .
b. Prepare a corrected balance sheet.
Mark Brock Services Co. | |||
Balance Sheet | |||
December 31 | |||
Assets | |||
Current assets: | |||
$ | |||
Total current assets | $ | ||
Property, plant, and equipment: | |||
$ | |||
$ | |||
Total property, plant, and equipment | |||
Total assets | $ | ||
Liabilities | |||
Current liabilities: | |||
$ | |||
Total liabilities | $ | ||
Owner's Equity | |||
Total liabilities and owner's equity | $ |
a. List the errors in the balance sheet. | |||
(1) Date of statement . | should be As of December 31 | ||
(2) Accounts payable . | is not Current Assets, it should be classsified as Current Liabilities | ||
(3) Land . | is not Current Assets | and | it should be classsified as Property, plant, and equipment |
(4) Accumulated depreciation | should be deducted | from the related fixed asset in the Property, Plant, and Equipment section. | |
(5) The amount of total assets . | should be the sum of Current Assets and Property, plant, and equipment | ||
(6) Accounts receivable . | is not Current Liabilities, it should be classsified as Current Assets | ||
(7) Net income . | should not come in the Balance Sheet, it only comes in the Income Statement | ||
(8) Wages payable . | is not Owner's Equity, it should be classsified as Current Liabilities |
Mark Brock Services Co. | |||
Balance Sheet | |||
December 31 | |||
Assets | |||
Current assets: | |||
Cash | 7,170 | ||
Accounts receivable | 10,000 | ||
Supplies | 2,590 | ||
Prepaid insurance | 800 | ||
Total current assets | 20,560 | ||
Property, plant, and equipment: | |||
Land | 24,000 | ||
Building | 43,700 | ||
Accum. depr.-building | (12,525) | 31,175 | |
Equipment | 29,250 | ||
Accum. depr.-equipment | (7,340) | 21,910 | |
Total property, plant, and equipment | 77,085 | ||
Total assets | 97,645 | ||
Liabilities | |||
Current liabilities: | |||
Accounts payable | 7,500 | ||
Wages payable | 1,500 | ||
Total liabilities | 9,000 | ||
Owner's Equity | |||
Mark Brock, capital | 88,645 | ||
Total liabilities and owner's equity | 97,645 |