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Eric's Bike Shop, Inc. A friend of yours has prepared the following balance sheet for his bicycle shop but it has problems

Eric's Bike Shop, Inc. A friend of yours has prepared the following balance sheet for his bicycle shop but it has problems

A friend of yours has prepared the following balance sheet for his bicycle shop but it has problems. He thought his total assets did not reflect the assets available to the firm. He has asked you to take a look at this balance sheet and help him out.
Eric's Bike Shop, Inc.
Balance Sheet
As of December 31, Year 1

Assets

Current Assets:

     Cash
$15,000 
     Merchandise Inventory
30,000 
     Merchandise Sold, at cost
37,500 
     Prepaid Insurance
1,000 
     Advance from Customer
  (1,000)
          Total Current Assets
$82,500 
Property, Plant, and Equipment:

     Equipment
8,000 
     Less Note Payable
  (5,000)
Total Assets
$85,500 


Liabilities and Shareholders' Equity

Current Liabilities:

     Bike Sales
$55,000
     Accounts Payable
2,000
     Accumulated Depreciation
700
     Rent Payable
    1,000
          Total Current Liabilities
$58,700
Shareholders' Equity:

     Common Stock 1,000 shares at $10 par value
$10,000
     Additional Paid-in Capital
7,500
     Retained Earnings
    9,300
          Total Shareholders' Equity
$26,800
Total Liabilities and Shareholders' Equity
$85,500


Required:
a. Prepare a corrected balance sheet for Eric's Bike Shop, Inc
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