Corrections To Sheila Shaw

SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007

Assets Liabilities
Current assets: Current liabilities: Cash $ 21,300 Accounts payable $ 1,250 Accounts receivable 3,800 Prepaid rent 2,050 Supplies 875 Unearned fees 1,150 Salaries payable 150 Total liabilities $ 4,450 Prepaid insurance 1,670 Total current assets $ 27,795
Property, plant, and equipment: Owner’s Equity Office equipment $ 21,250 Sheila Shaw, capital 47,720 Less accum. depr. 675 Total Property, plant, and equipment 20,575 Total liabilities and
Total assets $ 48,370 owner’s equity $ 52,170

In the balance sheet errors are – 1. salaries payable is a current liability 2. prepaid rent is a current asset and so we need to make these changes

Assets Liabilities
Current assets: Current liabilities: Cash $ 21,300 Accounts payable $ 1,250 Accounts receivable 3,800 Salaries Payable 150 Supplies 875 Unearned fees 1,150 Prepaid Rent 2,050 Total liabilities $ 2,550 Prepaid insurance 1,670 Total current assets $ 29,695
Property, plant, and equipment: Owner’s Equity Office equipment $ 21,250 Sheila Shaw, capital 47,720 Less accum. depr. 675 Total Property, plant, and equipment 20,575 Total liabilities and
Total assets $ 50,270 owner’s equity $ 50,270

SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2007

Fees earned $ 24,325
Expenses:
Salary expense $1,550 Depreciation expense 675 Rent expense 1,200 Supplies expense 1,250 Insurance expense 1,000 Miscellaneous expense 715 Interest expense 65 Bad Debt expense 150 Repairs and Maintenance 200 Utilities expense 150 Payroll Tax expense 125 Office expense 525

Total expenses 7,605
Net income $ 16,720

In the income statement depreciation expense has not been included. The balance sheet shows a depreciation of $675 which is an expense
SHEILA SHAW CONSULTING
Statement of Owner’s