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    Financial Accounting: Ceramics Inc; corrections to balance sheet

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    Ceramics, Inc. reported the following balance sheet for the year 2001.

    Balance Sheet
    For the Year Ending December 31, 2001

    Cash $2000
    Accounts Payable 500
    Inventory 900
    Equipment 1000
    Land 1500
    Total Assets $6000

    Accounts Receivable $3000
    Accrued Liabilities 1000
    Total Liabilities 4000

    Stockholders' Equity
    Common Stock 1800
    Retained Earnings 5100
    Total Stockholders' Equity 6900

    Total Liabilities and Stockholders' Equity $10900

    A) Identify and list the errors in the balance Sheet Above.
    B) Prepare a corrected balance sheet.

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    Solution Preview

    Corrected balance sheet is presented below.

    Balance Sheet for the year ending December 31, 2001

    Assets Cash 2000
    Inventory 900
    Accounts ...

    Solution Summary

    The solution explains the errors and presents a corrected balance sheet in good form.