Corrected Balance Sheet Dave is the president of Avon Consulting Inc. Avon began business on January 1, 2010.

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.

Avon Consulting Inc.

Balance Sheet For the Year Ended December 31, 2010 Assets Liabilities and Stockholders’ Equity Accounts payable $13,000 Accounts receivable $16,000 Cash 21,000 Capital stock 20,000 Cash dividends paid 16,000 Net income for 2010 72,000 Furniture and equipment 43,000 Supplies 9,000 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.

AppendixLO1