I\'m supposed to correct the mistakes that my professor circled, but I am not ex
ID: 2523605 • Letter: I
Question
I'm supposed to correct the mistakes that my professor circled, but I am not exactly sure what I did wrong. Please help. Entire problem is below.
PROBLEM 5-4B The account balances of Miss Beverly's Tutoring Service as of June 30, the end of the current fiscal year, are as follows: TRIAL BALANCE DEBIT CREDIT 6 ACCOUNT NAME 7 Cash 8 Accounts Receivable 9 Supplies 10 Prepaid Insurance 6,491.00 624.00 527.00 1,280.00 5,497.00 2,472.00 12Accumulated Depreciation, Equipment 13 Van 14 Accumulated Depreciation, Van 15 Accounts Payable 16 B. Morrow, Capital 17 B.Morrow, Drawing 18 Fees Earned 19 Salary Expense 20 Advertising Expense 21 Van Operating Expense 22 | Utilities Expense 23 Miscellaneous Expense 24 25 13,674.00 4,168.00 1,436.00 14,848.00 18,000.00 43,680.00 16,000.00 2,200.00 705.00 1,248.00 358.00 66.604.00 66,604.00 Sheet1 Sheet2 Sheet3Explanation / Answer
It looks like the only error being pointed out is that the amount of closing capital entered in the balance sheet is incorrect. This is causing the mismatch in the totals of the balance sheet. Closing capital in the balance sheet should be $19,415, as you have already calculated. However, this would make the total of the liabilities $21,425 while the total of the assets is $18,425. Since the details of adjusting entries have not been provided, the exact reason for the difference is not ascertainable. However, the difference being $3,000, the same can be attributed to the additional investment of capital of $3,000 shown in the statement of owners' equity. Since it is an additional investment, the same amount must also be reflected in the assets side in whatever form the investment was made, perhaps as cash or assets brought in.