P1-46B Preparing financial statements and evaluating business performance[20–30 min]
The bookkeeper of Outdoor Life Landscaping, Inc., prepared the company’s balance
sheet while the accountant was ill. The balance sheet contains numerous errors. In
particular, the bookkeeper knew that the balance sheet should balance, so he plugged
in the stockholders’ equity amount needed to achieve this balance. The stockholders’
equity is incorrect. All other amounts are right, but some are out of place.
Requirements1. Prepare a corrected balance sheet.
2. Consider the original balance sheet as presented and the corrected balance sheet
you prepared for requirement 1. Did total assets as presented in your corrected
balance sheet increase, decrease, or stay the same from the original balance
sheet? Why?
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