Jane Noonan is the bookkeeper for Wilson Company, Inc. Jane has been trying to get the company’s balance sheet to balance. She finally got it to balance, but she still isn’t sure that it is correct.

Instructions Explain to Jane Noonan in a memo

(a) the purpose of a balance sheet, and

(b) why this balance sheet is incorrect and what she should do to correct it.
ETHICS CASE

Transcribed Image Text:

WILSON COMPANY, INC. Balance Sheet For the Month Ended December 31, 2012 Liabilities and Stockholders' Equity Assets Equipment $18,000 Common stock $12,000 Cash 9,000 Accounts receivable (6,000) Supplies 1,000 Dividends (2,000) Accounts payable (4,000) Notes payable 10,000 Total assets $24,000 Retained earnings 10,000 Total liabilities and stockholders' equity $24,000