Problem:
I want some assistance with approaching this question. Any help will be greatly appreciated.
Pete is the president of Island Enterprises. Island Enterprises began business on January 1, 2008. The company's controller is out of the country on business. Pete needs a copy of the company's balance sheet for a meeting tomorrow and asks his assistant to obtain that required information from the company's records. She presents Pete with the following balance sheet. He asks you to review it for accuracy.
Island Enterprises
Balance Sheet
For the Year Ended December 31, 2008
Assets Liabilities and Stockholder's Equity
Accounts payable $29,600 Accounts receivable $23,200
Building and equipment 177,300 Supplies 12,200
Cash 14,750 Capital stock 100,000
Cash dividends paid 16,000 Net income for 2008 113,850
How would I:
1. Prepare a corrected balance sheet.
2. Draft a memo explaining the major differences between the balance sheet Pete's assistant prepared and the corrected balance sheet.