A friend of yours recently started a small business and he€™s prepared a balance sheet at the end of the first year. He€™s puzzled because the balance sheet doesn€™t balance and he isn€™t sure why. Examine the balance sheet below and make any corrections needed. Your friend also said there were a couple of items he didn€™t know what to do with: deposits from customers (the cash received was included in the cash balance)€”$2,000;equipment€”$18,000.

Transcribed Image Text:

Balance Sheet as of September 30 Assets Cash Accounts payable Inventory Cash dividend paid S 8,000 4,200 10,000 2,200 Liahilities and shareholders' equity Bank loan Accounts receivable Common shares Net income $16,000 2,400 8,000 10,400