Luol Deng CPA, was retained by Acie Cable to prepare financial statements for April 2012. Deng accumulated all the ledger balances per Acie’s records and found the following.
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ACIE CABLE |
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Trial Balance |
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April 30, 2012 |
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Debit |
Credit |
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Cash |
$ 4,100 |
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Accounts Receivable |
3,200 |
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Supplies |
800 |
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Equipment |
10,600 |
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Accumulated Depreciation—Equip. |
$ 1,350 |
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Accounts Payable |
2,100 |
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Salaries and Wages Payable |
700 |
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Unearned Service Revenue |
890 |
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Owner’s Capital |
12,900 |
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Service Revenue |
5,450 |
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Salaries and Wages Expense |
3,300 |
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Advertising Expense |
600 |
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Miscellaneous Expense |
290 |
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Depreciation Expense |
500 |
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$23,390 |
$23,390 |
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Luol Deng reviewed the records and found the following errors.
1. Cash received from a customer on account was recorded as $950 instead of $590.
2. A payment of $75 for advertising expense was entered as a debit to Miscellaneous Expense $75 and a credit to Cash $75.
3. The salary payment this month was for $1,900, which included $700 of salaries payable on March 31. The payment was recorded as a debit to Salaries and Wages Expense $1,900 and a credit to Cash $1,900.
4. The purchase on account of a printer costing $310 was recorded as a debit to Supplies and a credit to Accounts Payable for $310.
5. A cash payment of repair expense on equipment for $96 was recorded as a debit to Equipment $69 and a credit to Cash $69.
Instructions
(a) Prepare an analysis of each error showing (1) the incorrect entry, (2) the correct entry, and (3) the correcting entry. Items 4 and 5 occurred on April 30, 2012.
(b) Prepare a correct trial balance.