Erin Danielle, the bookkeeper for Liverpool Company Ltd., has been trying to get the statement of financial position to balance correctly. The company's statement of financial position is shown below.

Instructions
Explain to Erin Danielle in a memo why the original statement of financial position is incorrect, and what should be done to correct it.

Transcribed Image Text:

LIVERPOOL COMPANY LTD Statement of Financial Position For the Month Ended December 31, 2017 Assets Liabilities Equipment Cash Supplies Accounts payable £22,500 9,000 2,000 (8,000) £25,500 Share capital-ordinary £23 Accounts receivable Retained earnings Notes payable (6,000) (2,000) 10,500 £25,500