(Corrected Trial Balance) The trial balance of Geronimo Company, shown on the next page, does not balance. Your review of the ledger reveals the following: (a) Each account had a normal balance. (b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $1,000. (c) A transposition error was made in Accounts Receivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690, respectively. (d) A debit posting to Advertising Expense of $300 was omitted. (e) A $3,200 cash drawing by the owner was debited to Owner’s Capital and credited to Cash.
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GERONIMO COMPANY |
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Debit |
Credit |
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|
Cash |
$2,100 |
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|
Accounts Receivable |
2,570 |
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|
Prepaid Insurance |
700 |
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|
Equipment |
$8,000 |
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|
Accounts Payable |
4,500 |
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|
Property Taxes Payable |
560 |
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Owner’s Capital |
11,200 |
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|
Service Revenue |
6,960 |
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|
Salaries and Wages Expense |
4,200 |
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|
Advertising Expense |
1,100 |
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|
Property Tax Expense |
800 |
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|
$18,190 |
$24,500 |
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Instructions
Prepare a correct trial balance.