This trial balance of Lagerstrom Company does not balance.
|
LAGERSTROM COMPANY |
||
|
Debit |
Credit |
|
|
Cash |
$6,340 |
|
|
Accounts Receivable |
$2,750 |
|
|
Prepaid Insurance |
700 |
|
|
Equipment |
8,000 |
|
|
Accounts Payable |
4100 |
|
|
Income Taxes Payable |
850 |
|
|
Common Stock |
5,700 |
|
|
Retained Earnings |
6,000 |
|
|
Service Revenue |
7,690 |
|
|
Salaries and Wages Expense |
4,200 |
|
|
Advertising Expense |
1100 |
|
|
Income Tax Expense |
900 |
|
|
$28,680 |
$19,650 |
|
Your review of the ledger reveals that each account has a normal balance. You also discover the following errors.
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Income Tax Expense were each understated $100.
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $7,960, respectively.
3. A debit posting to Salaries and Wages Expense of $500 was omitted.
4. A $600 cash dividend was debited to Common Stock for $600 and credited to Cash for $600.
5. A $350 purchase of supplies on account was debited to Equipment for $350 and credited to Cash for $350.
6. A cash payment of $490 for advertising was debited to Advertising Expense for $49 and credited to Cash for $49.
7. A collection from a customer for $240 was debited to Cash for $240 and credited to Accounts Payable for $240.
Instructions
Prepare the correct trial balance, assuming all accounts have normal balances. (Note:The chart of accounts also includes the following: Dividends and Supplies.)