Question

In: Accounting

Assets Current assets:      Cash $7,170      Accounts payable 7,500      Supplies 2,590      Prepaid insurance 800 &n

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 $

Solutions

Expert Solution

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

ekkarill92 answered 2 years ago
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