The manager of Salem News, Inc., prepared the company€™s balance sheet as of April 30, 2012, 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 stockholders€™ equity amount needed to achieve this balance.
The stockholders€™ equity amount is not correct. All other amounts are accurate.

Requirements
1. Prepare the correct balance sheet and date it properly. Compute total assets, total liabilities, and stockholders€™ equity.
2. Is Salem News in better (or worse) financial position than the erroneous balance sheet reports? Give the reason for your answer.
3. Identify the accounts 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 accountsappear?

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News Salem, Inc Balance Sheet April 30, 2012 Assets Liabilities Cash Equipment Accounts payable Utilities expense Advertising expense Land Salary expense S 15,200 2,400 800 2,600 55,500 76,500 $ 11,000 Notes receivable 35,600 Interest expense 4,000 Office supplies 1,600 Accounts receivable 1,000 Note payable 84,000 Total 2,500 Stockholders' Equity Stockholders' equity 63,200 $139,700 Total assets $139,700 Total liabilities