what should I eliminate besides salary expense from assests and office supplies from liabilities?
Inc. prepared the com- LO 3,6 ny's accountant was ill. The balan ew that the balance sheet should counting equation; evaluate bus 3A. (Learning Obiectives 3.4. Apply the accounting equation; evaluate busine ions, construct a balance sheet) The manager of City News, Inc., prepared pany's balance sheet as of May 31, 2018, while cet contains numerous errors. In particular, the manager knew that the balance sheets alance, so she plugged in the stockholders' equity amount needed to achieve this balan The stockholders' equity amount is not correct. All other amounts are accurate, P1-6 an ir and 1 expe A $ 2 $ City News, Inc. Balance Sheet May 31, 2018 Assets 3 Cash 4 Equipment 5 Accounts payable 6 Utilities expense 7 Advertising expense 8 Land 9 Salary expense 10 11 Total assets 12 Liabilities 10,000 Notes receivable 35,600 Interest expense 6,500 Office supplies 1,400 Accounts receivable 400 Note payable 81,000 Total Stockholders' Equity Stockholders' equity 137 900 Total liabilities 15,800 2,100 700 2,600 50,000 71,200 Beg 66,700 137.900 $ $ Requirements 1. Prepare the correct balance sheet and date it properly. Compute total assets, total liabilities, and stockholders' equity. 2. Is City News actually in better (or worse) financial position than the erroneous balance sheet reports? Give the reason for your answer. 3. Identify the accounts listed on the incorrect balance sheet that should not be reported on the balance sheet. State why you excluded them from the correct balance sheet you prepared for Requirement 1. On which financial statement should these accounts appear? P1 DI GAAT. ca AL . Inc. prepared the com- LO 3,6 ny's accountant was ill. The balan ew that the balance sheet should counting equation; evaluate bus 3A. (Learning Obiectives 3.4. Apply the accounting equation; evaluate busine ions, construct a balance sheet) The manager of City News, Inc., prepared pany's balance sheet as of May 31, 2018, while cet contains numerous errors. In particular, the manager knew that the balance sheets alance, so she plugged in the stockholders' equity amount needed to achieve this balan The stockholders' equity amount is not correct. All other amounts are accurate, P1-6 an ir and 1 expe A $ 2 $ City News, Inc. Balance Sheet May 31, 2018 Assets 3 Cash 4 Equipment 5 Accounts payable 6 Utilities expense 7 Advertising expense 8 Land 9 Salary expense 10 11 Total assets 12 Liabilities 10,000 Notes receivable 35,600 Interest expense 6,500 Office supplies 1,400 Accounts receivable 400 Note payable 81,000 Total Stockholders' Equity Stockholders' equity 137 900 Total liabilities 15,800 2,100 700 2,600 50,000 71,200 Beg 66,700 137.900 $ $ Requirements 1. Prepare the correct balance sheet and date it properly. Compute total assets, total liabilities, and stockholders' equity. 2. Is City News actually in better (or worse) financial position than the erroneous balance sheet reports? Give the reason for your answer. 3. Identify the accounts listed on the incorrect balance sheet that should not be reported on the balance sheet. State why you excluded them from the correct balance sheet you prepared for Requirement 1. On which financial statement should these accounts appear? P1 DI GAAT. ca AL
