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Financial Accounting: Ceramics Inc; corrections to balance sheet

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.


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.