List the errors you find in the following balance sheet. Prepare a corrected balance sheet.Labyrinth Services Co. Balance Sheet For the Year Ended August 31, 2019 Assets Current assets: Cash

List the errors you find in the following balance sheet. Prepare a corrected balance sheet.


Labyrinth Services Co. Balance Sheet  For the Year Ended August 31, 2019 Assets Current assets: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $   18,500 Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,300
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,500 Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,600 Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   225,000 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $297,900 Property, plant, and equipment: Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $400,000 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      97,000 Total property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635,400 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $933,300 Liabilities Current liabilities: Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 41,400 Accumulated depreciation—building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,000 Accumulated depreciation—equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  118,200 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $339,600  Owner’s Equity
Wages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  6,500 Ruben Daniel, capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  587,200 Total owner’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593,700 Total liabilities and owner’s equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $933,300


Answers:
1. The date of the statement should be “August 31, 2019” and not “For the Year Ended August 31, 2019.”
2. Accounts payable should be a current liability.
3. Land should be classified as property, plant, and equipment.
4. “Accumulated depreciation” should be deducted from the related fixed asset.
5. An adding error was made in determining the amount of the total property, plant, and equipment.
6. Accounts receivable should be a current asset.
7. Net income should be reported on the income statement and statement of owner's equity.
8. Wages payable should be a current liability.

A corrected balance sheet would be as follows:


Current assets:
Cash$ 18,500
Accounts receivable41,400
Supplies6,500
Prepaid insurance16,600
Total current assets$ 83,000
Property, plant, and equipment:
Land$225,000
Building$400,000
Less accumulated depreciation 155,000 245,000
Equipment$ 97,000
Less accumulated depreciation 25,000 72,000
Total property, plant, and equipment542,000
Total assets$625,000
Current liabilities:
Accounts payable$ 31,300
Wages payable6,500
Total liabilities$ 37,800
Ruben Daniel, capital587,200
Total liabilities and owner’s equity$625,000