PART D : Financial Statements

INSTRUCTION: Read the questions carefully and use the information provided in each question to answer that question. Show all your calculation and workings.

QUESTION 1 (Time: 20-25 minutes)

The CEO of XYZ, Inc., prepared the firms balance sheet as of December 31,2020, while the accountant was on vacation. However, the balance sheet contains many mistakes. The common stock and total liabilities amount are not correct. All other amounts are accurate.

XYZ, Inc. Balance Sheet December 31,2019
	Liabilities		Assets
14,200	Notes Receivable	10,000	Cash
1,575	Rent	2,750	Salaries
2,200	Building	32,425	Supplies
1,550	Account Receivable	4,000	Notes Payable
54,600	Account Payable	1,600	Wages
74,125	Total Liabilities	1,000	Prepaid Expense
Stockholder Equity		84,000	Land
61,650	Common Stock
135,775	Total Equity and Total Liabilities	135,775	Total Assets

Requirements:

a Write the correct balance sheet with the proper headings. Calculate total assets, total

liabilities, and stockholder equity.

(Rubrics: 0.25 mark for each correct element in the balance sheet including the heading, 0.5 mark for the correct calculations of

equity. Total = 3.5 marks)

b 1. Identify the accounts that are not supposed to be on the balance sheet.

2. Explain why these accounts should be excluded from the balance sheet and on which financial statement should these accounts appear?

(Rubrics: 0.5 mark for each correct account, 0.5 mark for correct explanation. Total = 2 marks)