Required: Prepare a correct balance sheet with appropriate caption and sub caption. Use preferred terminology. Show computation of the ending balance in the retained earning.

2. The following trial baance was grepared by 0Z Company as of December 31, 2005. The adiusting entries for 2004 have made, except for amy specificaly noted below Cash Account Receivable Inventories Equipments Land 15,000 15,000 17.000 22.400 6.400 7,600 Building Deferred charges Accounts Payable Note Payable Capital stock (par $10) Earned surplus 1,100 5,500 8,000 38.500 32.500 84,500 84,500 You find that certain errors and omissions are reflected in the above trial balance, including the following: a. The $15,000 balance in the accounts receivable represents the entire amount owed to the company, of this amount, $12.400 is from trde customers, and 5% of that amount is estimated to be uncollectible The remaining amount owed to the company represents a long term advance to its president. b. Inventories include $1,000 of goods incorrectly valued at double their cost (i.e. Reported at $2,000). No correction has been recorded. Office supplies on hand of $500 also are included in the balance of inventories. c. When the equipmient and building were purchased new on January 1, 1993, they had estimated lives of 10 and 25 years respectively. They have been depreciated using the straight-line method on assumption of zero residual value, and depreciation has been credited directly to the asset accounts. Depreciation has been recorded for 2005. d. The balance in the land includes $1,000 payment made as a deposit of earnest money on the purchase of an adjoining tract. The option to buy it has not yet been exercised and probably will not be exercised during the coming year. e. The interest-bearing note dated April 1, 2005, matures March 31, 2006. Interest has not been recorded f. There are 2,500 common stock shares still outstanding. Page 15 of 2. The following trial baance was grepared by 0Z Company as of December 31, 2005. The adiusting entries for 2004 have made, except for amy specificaly noted below Cash Account Receivable Inventories Equipments Land 15,000 15,000 17.000 22.400 6.400 7,600 Building Deferred charges Accounts Payable Note Payable Capital stock (par $10) Earned surplus 1,100 5,500 8,000 38.500 32.500 84,500 84,500 You find that certain errors and omissions are reflected in the above trial balance, including the following: a. The $15,000 balance in the accounts receivable represents the entire amount owed to the company, of this amount, $12.400 is from trde customers, and 5% of that amount is estimated to be uncollectible The remaining amount owed to the company represents a long term advance to its president. b. Inventories include $1,000 of goods incorrectly valued at double their cost (i.e. Reported at $2,000). No correction has been recorded. Office supplies on hand of $500 also are included in the balance of inventories. c. When the equipmient and building were purchased new on January 1, 1993, they had estimated lives of 10 and 25 years respectively. They have been depreciated using the straight-line method on assumption of zero residual value, and depreciation has been credited directly to the asset accounts. Depreciation has been recorded for 2005. d. The balance in the land includes $1,000 payment made as a deposit of earnest money on the purchase of an adjoining tract. The option to buy it has not yet been exercised and probably will not be exercised during the coming year. e. The interest-bearing note dated April 1, 2005, matures March 31, 2006. Interest has not been recorded f. There are 2,500 common stock shares still outstanding. Page 15 of