The manager of Salem News, Inc., prepared the company's balance sheet as of October 31, 2016, while the accountant was ill. The balance sheet contains numerous errors. In particular, the manager knew that the balance sheet should balance, so she 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 Salem News 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 accounts appear?

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A1 Salem News, Inc. Balance Sheet October 31, 2016 Assets Liabilities 3 Cash 4 Equipment 5 Accounts payable 6 Utilities expense 7 Advertising expense 8 Land 9 Salary expense 10 11 Total assets 12 15500 2000 1300 2800 55,000 76,600 10500 Notes receivable 35000 Interest expense 5,000 Office supplies 1100 Accounts receivable 900 Note payable 4,000 Total 2500 Stockholders' Equity Stockholders' equity 62 400 $139,000 139000 Total liabilities