Ashley Hirano, the bookkeeper for New York Company, has been trying to develop the correct balance sheet for the company. The company’s balance sheet is shown as follows.

Instructions

Explain to Ashley Hirano in a memo why the original balance sheet is incorrect and what should be done to correct it.

Transcribed Image Text:

New York Company Balance Sheet For the Month Ended December 31, 2022 Assets Liabilities Equipment $25,500 Common stock $22,000 9,000 Ассоunts receivable Cash (6,000) Supplies 2,000 Retained earnings 2,000 (8,000) Notes payable Асcounts 10,500 payable $28,500 $28,500