The manager of Philly Automotive, Inc., prepared the company€™s balance sheet as of June 30, 2014, while the accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balance, so he plugged in the stockholders€™ equity amount needed to achieve this balance. The stockholders€™ equity amount is not correct. All other amounts are accurate.

Requirements
1. Prepare the correct balance sheet and date it properly. Compute total assets, total liabilities, and stockholders€™ equity.
2. Is Philly Automotive actually in better (or worse) financial position than the erroneous balance sheet reports? Give the reason for your answer.
3. Identify the accounts listed on the incorrect balance sheet that should not be reported on the balance sheet. State why you excluded them from the correct balance sheet you prepared for Requirement 1. On which financial statement should these accountsappear?

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A1 Philly Automotive, Inc. Balance Sheet June 30, 2014 Assets Liabilities Cash Equipment Accounts payable Utilities expense Advertising expense 44,100 Notes receivable 78,300 Interest expense 18,800 Office supplies 33,400 5,300 1,700 5,800 122,400 168,600 3,600 Accounts receivable 2,500 Note payable 6 Land 184,700 Total 35,900 9 Salary expense 10 Stockholders' Equity Stockholders' equity 199,300 367 900 11 Total assets $367 900 Total liabilities