Reference no: EM13538798
The debit and credit totals of the following trial balance are unequal as a result of the following errors. Prepare a corrected trial balance as of June 30 of the current year.
|
Cash
|
$26,500
|
|
|
Accounts Receivable
|
37,775
|
|
|
Prepaid Insurance
|
800
|
|
|
Office Supplies
|
960
|
|
|
Accounts Payable
|
|
$11,410
|
|
Notes Payable
|
|
6,000
|
|
Capital Stock
|
|
7,500
|
|
Retained Earnings
|
|
25,340
|
|
Dividends
|
|
2000
|
|
Fees Earned
|
|
126,500
|
|
Wages Expense
|
84,100
|
|
|
Rent Expense
|
5,500
|
|
|
Advertising Expense
|
3,900
|
|
|
Automobile Expense
|
275
|
|
|
Miscellaneous Expense
|
1,550
|
|
|
Totals
|
$161,360
|
$178,750
|
Errors noted:
a) The balance of cash was understated by $750. (Cash +750)
b) A cash receipt of $2,100 was posted as a debit to Cash of $1,200. (Cash +900) c)
c) A debit of $3,000 for a cash dividend was posted as a credit to Retained Earnings. (Dividends +3,000; RE -3,000)
d) The balance of $2,750 in Automobile Expense was entered in the trial balance as $275. (Auto Exp. = 2,750)
e) A debit of $975 to Accounts Receivable was not posted. (A/R +975)
f) A return of $125 of defective supplies was erroneously posted as a $215 credit to Supplies. (Supplies +90)
g) An insurance policy acquired at a cost of $150 was posted as a credit to Prepaid Insurance. (Prepaid Ins. +300)
h) A debit of $900 in Accounts Payable was overlooked when determining the balance of the account. (A/P -900)
i) The balance of Notes Payable was overstated by $5,000. (Notes Payable -5,000)
j) The balance of cash was understated by $750. (Cash +750)
k) A cash receipt of $2,100 was posted as a debit to Cash of $1,200. (Cash +900)