Balance sheet List any errors you can find in the following balance sheet. Prepare a corrected balance sheet.

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To determine Concept Introduction: The balance sheet is a part of the financial statements of a company which provides an overall view of assets and liabilities along with equity of the company. This statement is prepared on a specified date containing all the ending balances of the financial accounts with regard to assets, liabilities, and equity. To Prepare: A rectified balance sheet for the year ended May 31 , 20 Y5 . Explanation The errors that are found in the balance sheet are: The accounts payable is a current liability item and not the current asset. So, it should be under current liability. The land is a tangible and non-current item and should be shown under property, plant, and equipment and not under current liability. Accumulated depreciation is not any cash item to pay. It is a reduction from the cost of the asset as per its usage and obsolescence. Hence, it should be reduced from the cost of the respective asset and not to be a part of current liability. The accounts receivable is a current asset item and not the current liability. So, it should be under the current asset. Net loss is an adjustable item in the retained earnings. As the closing balance of retained earnings is provided, it means this net loss has been already adjusted. So, there is no need to report the same again in the current liability. The wages payable is a current liability item and not the stockholders' equity. So, it should be under current liability. V.S. Co. Balance Sheet for the year endedMay 31 , 20 Y5 Assets ( $ ) Amount ( $ ) Cash 12 , 000 Accounts receivable 40 , 800 Prepaid insurance 17 , 400 Supplies 4 , 800 Total current assets 75 , 000 Property, plant, and equipment: Land 400 , 000 Building 225 , 000 Accumulated depreciation

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Survey of Accounting (Accounting I)

8th Edition

Carl Warren

Publisher: Cengage Learning

ISBN: 9781305961883

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BuyFind

Survey of Accounting (Accounting I)

8th Edition

Carl Warren

Publisher: Cengage Learning

ISBN: 9781305961883

Solutions

Chapter

Section

Answer 3

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Answer 4

Chapter

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Answer 5

To determine

Concept Introduction:

The balance sheet is a part of the financial statements of a company which provides an overall view of assets and liabilities along with equity of the company. This statement is prepared on a specified date containing all the ending balances of the financial accounts with regard to assets, liabilities, and equity.

To Prepare:

A rectified balance sheet for the year ended May 31,20Y5.

Explanation of Solution

The errors that are found in the balance sheet are:

The accounts payable is a current liability item and not the current asset. So, it should be under current liability.

The land is a tangible and non-current item and should be shown under property, plant, and equipment and not under current liability.

Accumulated depreciation is not any cash item to pay. It is a reduction from the cost of the asset as per its usage and obsolescence. Hence, it should be reduced from the cost of the respective asset and not to be a part of current liability.

The accounts receivable is a current asset item and not the current liability. So, it should be under the current asset.

Net loss is an adjustable item in the retained earnings. As the closing balance of retained earnings is provided, it means this net loss has been already adjusted. So, there is no need to report the same again in the current liability.

The wages payable is a current liability item and not the stockholders' equity. So, it should be under current liability.

V.S. Co.

Balance Sheet

for the year endedMay 31,20Y5

Assets	($)	Amount ($)
Cash	12,000
Accounts receivable	40,800
Prepaid insurance	17,400
Supplies	4,800
Total current assets		75,000
Property, plant, and equipment:
Land	400,000
Building	225,000
Accumulated depreciation

Balance sheet List any errors you can find in the following balance sheet. Prepare a corrected balance sheet.

Survey of Accounting (Accounting I)

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Survey of Accounting (Accounting I)

Balance sheet
List any errors you can find in the following balance sheet. Prepare a corrected balance sheet.

Explanation of Solution

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