The bookkeeper of McBride Insurance Agency prepared the balance sheet of the company while the accountant was ill. The balance sheet contains errors. In particular, the bookkeeper knew that the balance sheet should balance, so she “plugged in” the owner’s equity amount needed to achieve this balance. The owner’s equity amount, however, is not correct.
All other amounts are accurate except the “Total assets” amount.
Required
1. Prepare the corrected balance sheet, and date it correctly. Compute total assets, total liabilities, and owner’s equity.
2. Identify the accounts listed above that should not be presented on the balance sheet and state why you excluded them from the corrected balance sheet you prepared for Requirement 1.
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