You find that certain errors and omissions are reflected in the above trial balance, including the following: a. The $15000 balance in the accounts receivable represents the entire amount owed to the company represents a long term advance to its president. b. Inventories include $1000 of goods incorrectly valued at double their cost (i.e reported at $2000). No correction has been recorded. Office supplies on hand of $500 also are included in the balance inventories. c. When the equipment and building were purchased new on january 1, 1993, they had estimated lives of 10 and 25 years respectively. They have been depreciated using the straight line method on assumption of zero residual value, and depreciation has been credited directly to the asset accounts. Depreciation has been recorded for 2005. d. The balance in the land includes $1000 payment made as a deposit of earnest money on the purchase of an adjoining tract. The option to buy it has not yet been exercised and probably will not exercised during the coming year. e. The interest bearing noted dated April 1, 2005 matures March 31,2006. Interest has not been recorded. f. There are 2500 common stock shares still outstanding.

Required: Prepare a correct balance sheet with approciate captions and sub-caption. Use preferred terminology. Show computation of the ending balance in the retained earning.

2. The following trial balance was prepared by OZ Company as of December 31, 2005. The adjusting entries for 2004 have made, except for any specifically noted below Cash Account Receivable Inventories 15,000 15,000 17,000 22,400 Equipment Land 6,400 Building Deferred charges Accounts Payable Note Payable Capital stock (par $10) Earned surplus 7,600 1,100 5,500 8,000 38,500 32,500 84,500 84,500 2. The following trial balance was prepared by OZ Company as of December 31, 2005. The adjusting entries for 2004 have made, except for any specifically noted below Cash Account Receivable Inventories 15,000 15,000 17,000 22,400 Equipment Land 6,400 Building Deferred charges Accounts Payable Note Payable Capital stock (par $10) Earned surplus 7,600 1,100 5,500 8,000 38,500 32,500 84,500 84,500 Required: Prepare a correct balance sheet with appropriate captions and sub-caption. Use preferred terminology. Show computation of the ending balance in the retained earning