The trial balance of the Kellen Davis Company shown below does not balance.
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KELLEN DAVIS COMPANY |
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Trial Balance |
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May 31, 2012 |
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Debit |
Credit |
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Cash |
$ 5,850 |
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Accounts Receivable |
$ 2,750 |
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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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Unearned Service Revenue |
650 |
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Owner’s Capital |
11,700 |
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Service Revenue |
6,690 |
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Salaries and Wages Expense |
4,200 |
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Advertising Expense |
1,100 |
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Insurance Expense |
890 |
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$26,980 |
$20,050 |
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 Insurance 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 $6,960, respectively.
3. A debit posting to Salaries and Wages Expense of $200 was omitted.
4. A $1,000 cash drawing by the owner was debited to Owner’s Capital for $1,000 and credited to Cash for $1,000.
5. A $520 purchase of supplies on account was debited to Equipment for $520 and credited to Cash for $520.
6. A cash payment of $540 for advertising was debited to Advertising Expense for $54 and credited to Cash for $54.
7. A collection from a customer for $210 was debited to Cash for $210 and credited to Accounts Payable for $210.
Instructions
Prepare a correct trial balance. Note that the chart of accounts includes the following: Owner’s Drawings and Supplies.