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Date Submitted: 05/03/2011 09:09 AM
SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007
Assets Liabilities
Current assets: Current liabilities:
Cash $ 21,300 Accounts payable $ 1,250
Accounts receivable 3,800 Prepaid rent 2,050
Supplies 875 Unearned fees 1,150
Salaries payable 150 Total liabilities $ 4,450
Prepaid insurance 1,670
Total current assets $ 27,795
Property, plant, and
equipment: Owner’s Equity
Office equipment $ 21,250 Sheila Shaw, capital 47,720
Less accum. depr. 675
Total Property, plant,
and equipment 20,575 Total liabilities and
Total assets $ 48,370 owner’s equity $ 52,170
I have highlighted in red the two errors that were made in the income statement. Salaries payable of $150 should be listed as a current liability and prepaid rent of $2,050 should be listed as a current asset. I will post below an example of the Balance sheet with these 2 errors fixed. This allows the Assets and Liabilities to equal out.
SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007
Assets Liabilities
Current assets: Current liabilities:
Cash $ 21,300 Accounts payable $ 1,250
Accounts receivable 3,800 Salaries payable 150
Supplies 875 Unearned fees 1,150
Prepaid rent 2050 Total liabilities $ 2,550
Prepaid insurance 1,670
Total current assets $ 29,695
Property, plant, and
equipment: Owner’s Equity
Office equipment $ 21,250 Sheila Shaw, capital 47,720
Less accum. depr. 675
Total Property, plant,
and equipment 20,575 Total liabilities and
Total assets $ 50,270 owner’s equity $ 50,270
SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2007
Fees earned $ 24,325
Expenses:
Salary expense $1,550
Rent expense 1,200
Supplies expense 1,250
Insurance expense 1,000
Miscellaneous expense 715
Depreciation expense………………………………………. 675
Interest expense 65
Bad Debt expense 150...