Pete is the president of Island Enterprises. Island Enterprises began business at the beginning of the current year. The company’s controller is out of the country on business. Pete needs a copy of the company’s balance sheet for a meeting tomorrow and asks his assistant to obtain the required information from the company’s records. She presents Pete with the following balance sheet. He asks you to review it for accuracy.

Required
1. Prepare a corrected balance sheet.
2. Draft a memo explaining the major differences between the balance sheet Pete’s assistant prepared and the one you prepared.