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)