Dave is the president of Avon Consulting Inc. Avon began business on January 1, 2012. The company's controller is out of the country on business. Dave needs a copy of the company's balance sheet for a meeting tomorrow and asks his assistant to obtain the required information from the company's records. She presents Dave with the following balance sheet. He asks you to review it for accuracy.

Required
1. Prepare a corrected balance sheet.
2. Draft a memo explaining the major differences between the balance sheet Dave's assistant prepared and the one you prepared.

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Avon Consulting Inc. Balance Sheet For the Year Ended December 31,2012 Assets Accounts payable Cash Cash dividends paid Furniture and equipment $13,000 21,000 16,000 43,000 Liabilities and Stockholders' Equity Accounts receivable Capital stock Net income for 2012 Supplies $16,000 20,000 72,000 9,000