The bookkeeper of Beautiful World Landscaping, Inc., prepared the company’s balance sheet while the accountant was ill. The balance sheet contains numerous errors. In particular, the bookkeeper knew that the balance sheet should balance, so he plugged in the stockholders’ equity amount needed to achieve this balance. The stockholders’ equity is incorrect. All other amounts are right, but some are out of place.

Requirements 

1. Prepare a corrected balance sheet.

2. Consider the original balance sheet as presented and the corrected balance sheet you prepared for requirement 1. Did total assets, as presented in your corrected balance sheet increase, decrease or stay the same from the original balance sheet? Why?

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BEAUTIFUL WORLD LANDSCAPING, INC. Balance Sheet Month Ended August 31, 2007 Assets Liabilities Cash $ 5,100 Accounts receivable $ 2,400 Office supplies 700 Common stock 8,000 Land 36,100 Service revenue 39,400 Salary expense 3,900 Property tax expense 1,700 Office furniture 5,900 Accounts payable 2,000 Note payable 23,300 Rent expense 600 Stockholders' Equity Retained earnings 22,100 Total assets $ 75,600 Total liabilities $ 75,600