BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
1 views

Balance sheet

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

Chapter 4, Problem 4.13EX, Balance sheet List the errors you find in the following balance sheet. Prepare a corrected balance

To determine

Classified balance sheet

Classified Balance Sheet: In order to improve the ease of understanding, a classified balance sheet is used. Classified balance sheet categorizes each item of assets, liabilities, and stockholders ‘equity into a specific category.

A classified balance sheet is prepared under the following heading:

Assets Liabilities
Current assets: Current liabilities:
Cash Accounts payable
Marketable securities Interest payable
Accounts receivable Unearned revenues
Inventories Notes payable
Prepaid expenses Current maturities of long-term debt
Office supplies Total current liabilities
Total current assets
Investments: Long-term liabilities:
Marketable securities Bonds payable
Land held for investment Notes payable
Total investments Mortgage payable
Total long-term liabilities
Property, plant and equipment:
Land Owners’ equity:
Building Capital
Equipment Total Liabilities and Owners’ Equity
Less: Accumulated depreciation
Net property, plant and equipment
Intangibles:
Copyrights
Total Assets

Table (1)

To List: The errors in the balance sheet.

Explanation
  • In balance sheet the date must be “at august or as on August 31, 2016” but in the given balance sheet it’s mentioned as “For the Year Ended August 31, 2016”.
  • In current asset category, instead of accounts receivable, the item of accounts payable were wrongly reported. Similarly, in current liabilities category, instead of accounts payable, the item of accounts receivable were wrongly reported.
  • The item of land should be reported under the category of property, plant and equipment...
To determine

To Prepare: A Corrected balance sheet of L Service Company at August 31, 2016.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

PORTFOLIO BETA An individual has 35,000 invested in a stock with a beta of 0.8 and another 40,000 invested in a...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Why do economists make assumptions?

Brief Principles of Macroeconomics (MindTap Course List)

What does the invisible hand of the marketplace do?

Essentials of Economics (MindTap Course List)

Discuss some of the techniques available to reduce risk exposure.

Fundamentals of Financial Management (MindTap Course List)