Ned Robinson, the manager of Lunenberg Times Inc., prepared the balance sheet of the company while the accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balance, so he plugged in the shareholders' equity amount needed to achieve this balance. The shareholders' equity amount, however, is not correct. All other amounts are accurate

{Requirements}
1. Identify the accounts listed in the incorrect balance sheet that should not be reported on the balance sheet. Which financial statement should these accounts appear on?
2. Prepare the correct balance sheet, and date it properly.
3. Is Lunenberg Times Inc. actually in better or worse financial position than the erroneous balance sheet reports? Give the reason for your answer.

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A Lunenberg Times Inc. Balance Sheet For the Month Ended October 31, 2020 B C D 23 Assets Liabilities 3 Cash $ 25,000 Accounts receivable $ 10,000 4 Office furniture 15,000 Sales revenue 70,000 5 Note payable 16,000 Salary expense 20,000 6 Rent expense 4,000 Accounts payable 8,000 7 Inventory 30,000 Total 108,000 8 Land 34,000 Shareholders' Equity 9 Advertising expense 2,500 Shareholders equity 18.500 10 Total assets $126,000 Total liabilities $ 126,500 11