LO 3, 4 P1-71B. (Learning Objectives 3, 4: Apply the accounting equation; evaluate business operations; construct...

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LO 3, 4 P1-71B. (Learning Objectives 3, 4: Apply the accounting equation; evaluate business operations; construct a balance sheet) The manager of Parker Design, Inc., prepared the company's balance sheet as of March 31, 2021, while the company's 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. A1 1 2 Parker Design, Inc. Balance Sheet March 31, 2021 Assets 3 Cash 4 Equipment 5 Accounts payable 6 Utilities expense 7 Advertising expense 8 Land 9 Salary expense 10 11 Total assets 12 Liabilities $ 8,000 Notes receivable 39,000 Interest expense $ 13,000 1,500 3,500 Office supplies 1,400 1,600 Accounts receivable 400 Note payable 86,000 Total 3,900 53,000 72,800 3,000 Stockholders' Equity Stockholders' equity 68,700 $ 141,500 Total liabilities $ 141,500 Requirements 1. Prepare the correct balance sheet and date it properly. Compute total assets, total liabilities, and stockholders' equity. 2. Is Parker Design, Inc., 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? LO 3, 4 P1-71B. (Learning Objectives 3, 4: Apply the accounting equation; evaluate business operations; construct a balance sheet) The manager of Parker Design, Inc., prepared the company's balance sheet as of March 31, 2021, while the company's 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. A1 1 2 Parker Design, Inc. Balance Sheet March 31, 2021 Assets 3 Cash 4 Equipment 5 Accounts payable 6 Utilities expense 7 Advertising expense 8 Land 9 Salary expense 10 11 Total assets 12 Liabilities $ 8,000 Notes receivable 39,000 Interest expense $ 13,000 1,500 3,500 Office supplies 1,400 1,600 Accounts receivable 400 Note payable 86,000 Total 3,900 53,000 72,800 3,000 Stockholders' Equity Stockholders' equity 68,700 $ 141,500 Total liabilities $ 141,500 Requirements 1. Prepare the correct balance sheet and date it properly. Compute total assets, total liabilities, and stockholders' equity. 2. Is Parker Design, Inc., 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?

Answer rating: 100% (QA)

1 To prepare the correct balance sheet we need to compute total assets total liabilities and stockholders equity Total assets Cash Equipment Accounts ... View the full answer