List any errors you can find in the following partial balance sheet: Napa Vino Company

List any errors you can find in the following partial balance sheet:


Napa Vino Company
Balance Sheet
December 31, 2014
Assets
Current assets:
Cash $ 78,500
Notes receivable $ 300,000
Less interest receivable 4,500 295,500
Accounts receivable $1,200,000
Plus allowance for doubtful accounts 11,500 1,211,500







Answer:
1. The interest receivable should be reported separately as a current asset. It should not be deducted from notes receivable.

2. The allowance for doubtful accounts should be deducted from accounts receivable.

A corrected partial balance sheet would be as follows:





NAPA VINO COMPANY
Balance Sheet
December 31, 2014
Assets
Current assets:
Cash $ 78,500
Notes receivable 300,000
Accounts receivable $1,200,000
Less allowance for doubtful accounts 11,500 1,188,500
Interest receivable 4,500