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 of errors in the Balance Sheet

1. Date of statement is not given. Balance sheet prepared at the end of the period

2. Accounts payable is an item of current liability, it is wrongly shown as an item of current asset

3. Land is not an item of current asset and it is an item of property, plant and equipment

4. Accumulated depreciation needs to reduce from the related fixed asset in the property, plant and equipment section. It is wrongly shown as an item of current liability

5. The amount of total asset is wrong in this statement.

6. Accounts receivable is wrongly entered in current liabilities and it is an item of current asset

7. Net income is an item in the income statement, not a balance sheet item

8. Wages payable is an item of current liabilities and it is wrongly entered in owner's equity

b. Corrected Balance Sheet

ekkarill92 answered 1 year ago
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