Corrected Balance Sheet Dave is the president of Avon Consulting Inc. Avon began business on January 1, 1998. 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 asked his secretary to obtain the required information from the company's records. She presented Dave with the follow- ing 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 secretary prepared and the one you prepared.

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AVON CONSULTING INC. BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31, 1998 ASSETS Accounts payable Cash LIABILITIES AND OWNERS' EQUITY $13,000 Accounts receivable $16,000 21,000 Capital stock 20,000 Cash dividends paid 16,000 Net income for 1998 72,000 Furniture and equipment 43,000 Supplies 9,000