Corrected Balance Sheet Pete is the president of Island Enterprises. Island Enterprises began business on January 1, 2010. The company’s controller is out of the country on business. Pete 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 Pete with the following balance sheet. He asks you to review it for accuracy.

Island Enterprises Balance Sheet For the Year Ended December 31, 2010 Assets Liabilities and Stockholders’ Equity Accounts payable $ 29,600 Accounts receivable $ 23,200 Building and equipment 177,300 Supplies 12,200 Cash 14,750 Capital stock 100,000 Cash dividends paid 16,000 Net income for 2010 113,850 Required 1. Prepare a corrected balance sheet.

2. Draft a memo explaining the major differences between the balance sheet Pete’s assistant prepared and the one you prepared.

AppendixLO1