Question

List the errors you find in the following balance sheet. Prepare a corrected balance sheet. Labyrinth Services Co. Balance Sheet For the Year Ended August 31, 2019 Assets Current assets: Cash ........ $ 18,500 Accounts payable. 31,300 Supplies .... 6,500 Prepaid insurance 16,600 Land......... 225,000 Total current assets $297,900 Property, plant, and equipment: Building........ $400,000 Equipment... 97,000 Total property, plant, and equipment. 635,400 Total assets.... $933,300 Liabilities Current liabilities: Accounts receivable.... Accumulated depreciation-building. Accumulated depreciation-equipment Net income $ 41,400 155,000 25,000 118,200

Answer 1

Labyrinth Services Co. Balance Sheet August 31, 2019 Assets Current Assets Cash 18,500 Accounts Receivables 41,400 Supplies 6,500 Prepaid Insurance 16,600 Total Current Assets 83,000 Property Plant and Equipment: Buildings Equipments Land Total Property Plant and Equipment: Total Assets 245,000 72,000 225,000 542,000 625,000 Liabilities Current Liabilities Accounts Payable Wages Payable Total Liabilities 31,300 6,500 37,800 Owners Equity Ruben Daniel, Capital $ 587,200 Total Owners Equity Total Liabilities and Owners Equity $ 587,200 625,000

Note 1
Land		225,000
Buildings	400,000
Less: Accumulated Depreciation	155,000	245,000
Equipments	97,000
Less: Accumulated Depreciation	25,000	72,000
Machinery	-
Less: Accumulated Depreciation	-	-
Total Tangible Assets		542,000

Note 2
Cash		18,500
Bank		-
Cash and cash equivalents		18,500

Interest Receivable		-
Accounts Receivables		41,400
Notes Receivables		-
Prepaid rent		-
Supplies		6,500
Prepaid Insurance		16,600
Other Current Assets		64,500

Notes Payable		-
Accounts Payable		31,300
Accounts Payable		-
Wages Payable		6,500
Trade and other payables		37,800

Labyrinth Services Co.
Statement of Stockholders' Equity
For the Year ended August 31, 2019
	Common stock	Retained Earnings	Total Shareholders' equity
Balance as at Jan 1 2021	$               469,000	$                                     -	$                                    469,000
Less Dividends		$                                     -	$                                                -
Net Income		$                         118,200	$                                    118,200
Balance as at Dec 31 2021	$               469,000	$                         118,200	$                                    587,200

Notes

1. Accounts Payable to be shown in liabilities instead of Assets

2 Account receivable to be shown in Assets instead of Liabilities

3. Land is a part of Property Plant and Equipment instead of Current Assets.

4. Accumulated depreciation to be adjusted with Property Plant and equipment instead of shown as liabilities.

5. total of PPE is wrong in given question.

6. Net income is a part of Qwners equity.

7. wages Payable to be shown as Liabilities because it is not owners equity.