Erin Danielle, the bookkeeper for Liverpool Ltd., has been trying to determine the correct statement of financial position for the company. 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 Ltd. Statement of Financial Position For the Month Ended December 31, 2020 Liabilities Assets Equipment Cash Supplies Accounts payable £26,000 (5,000) (2,000) Share capital-ordinary £25,500 9,000 Accounts receivable Dividends Notes payable 3,000 (8,000) 10,500 £29,500 £29,500