Amy Joan is the bookkeeper for Vermont Company, Inc. Amy has been trying to get the company's balance sheet to balance. She finally got it to balance, but she still isn't sure that it is correct.

\section*{Instructions}
Explain to Amy Joan in a memo why the balance sheet is incorrect and what she should do to correct it.

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VERMONT COMPANY, INC. Balance Sheet For the Month Ended December 31, 1998 Assets Liabilities and Stockholders' Equity Equipment $20,500 Common stock $11,000 Cash 9,000 Accounts receivable (3,000) Supplies 2,000 Dividends (2,000) Accounts payable (5,000) Notes payable 10,500 Total assets $26,500 Retained earnings 10,000 Total liabilities and stockholders' equity $26,500