Marci Ling is the bookkeeper for Samco Company, Inc. Marci has been trying to get the company's balance sheet to balance. She finally got it to balance, but she still isn't sure that it is correct.

Instructions
Explain to Marci Ling in a memo
(a) The purpose of a balance sheet, and
(b) Why this balance sheet is incorrect and what she should do to correct it.

Transcribed Image Text:

SAMCO COMPANY, INC Balance Sheet For the Month Ended December 31, 2017 Liabilities and Stockholders' Equity 12,000 (6,000) (2,000) 10,000 10,000 Assets 18,000 Common stock Equipment Cash Supplies Accounts payable Total assets 9,000 Accounts receivable 1,000 Dividends 4,000) Notes payable 24,000 Retained earnings To liabilities and stockholders' equity $24,000