Corrected Trial Balance The debit and credit totals are not equal as a result of
ID: 2452254 • Letter: C
Question
Corrected Trial Balance
The debit and credit totals are not equal as a result of the following errors:
The cash entered on the trial balance was overstated by $8,000.
A cash receipt of $4,100 was posted as a debit to Cash of $1,400.
A debit of $12,350 to Accounts Receivable was not posted.
A return of $235 of defective supplies was erroneously posted as a $325 credit to Supplies.
An insurance policy acquired at a cost of $3,000 was posted as a credit to Prepaid Insurance.
The balance of Notes Payable was overstated by $21,000.
A credit of $3,450 in Accounts Payable was overlooked when the balance of the account was determined.
A debit of $6,000 for dividends was posted as a debit to Retained Earnings.
The balance of $28,350 in Advertising Expense was entered as $23,850 in the trial balance.
Miscellaneous Expense, with a balance of $4,600, was omitted from the trial balance.
Required:
1. Prepare a corrected unadjusted trial balance as of January 31, 2014. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank.
Tech Support Services
Unadjusted Trial Balance
January 31, 2014
Debit Balances
Credit Balances
2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts?
SelectYesNoCorrect 1 of Item 2
1. Prepare a corrected unadjusted trial balance as of January 31, 2014. List all accounts in the order of Assets, Liabilities, Stockholders’ equity, Revenues, and Expenses. If an amount box does not require an entry, leave it blank.
Tech Support Services
Unadjusted Trial Balance
January 31, 2014
Debit Balances
Credit Balances
Explanation / Answer
The correction effects will be Correction effect Account Dr $ Cr$ Cash 8,000 Cash 2,700 Accounts receivable 12,350 Supplies 325 Supplies 235 Prepaid Insurance 3,000 Prepaid Insurance 3,000 Notes Payable 21,000 Accounts Payable 3,450 Retained Earnings 6,000 Dividends 6,000 Advertisisng Expense 4,500 Miscellaneous Expense 4,600 Total 57,475 17,685 Tech Support Services Unadjusted TB Jan 31. 2014. 1 Accounts Dr $ Cr$ Cash 20,250 Accounts receivable 56,400 Supplies 6,750 Prepaid Insurance 9,600 Equipment 162,000 Notes Payable 54,000 Accounts Payable 16,650 Capital Stock 18,000 Retained Earnings 89,850 Dividends 39,000 Fees Earned 534,000 Wages Expenses 306,000 Rent Expense 62,550 Gas Electricity & Water Expense 17,000 Advertising Expense 28,350 Miscellaneous Expense 4,600 Total 712,500 712,500 2 The unadjusted error is balanced does not indicate that the accounts are error free. There may be Compensating errors in different accounts or there may be wrong opoosit debit and credit entries of wrong amounts or logically wrong opposite debit credit entries of correct amounts. Apart from that there are many adjustment entries for accruals, provisions etc are needed to make the accounting accurate.