AC 210 Lecture Notes - Lecture 8: Trial Balance, Accounts Payable, General Ledger

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silvercicada472

5 Jun 2018

School

University of Alabama

Department

Accountancy

Course

AC 210

Professor

Lisa Mc Kinney

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The Trial Balance

After posting all transactions from an accounting period, accountants prepare a trial

balance to verify that the total of all accounts with debit balances equals the total of all

accounts with credit balances. The trial balance lists every open general ledger account

by account number and provides separate debit and credit columns for entering account

balances. The Greener Landscape Group's trial balance for April 30,20X2 appears

below.

The Greener Landscape Group Trial Balance April 30,20X2

Account

Debit

Credit

100

Cash

$ 6,355

110

Accounts Receivable

150

140

Supplies

145

Prepaid Insurance

1,200

150

Equipment

3,000

155

Vehicles

15,000

200

Accounts Payable

$ 50

250

Unearned Revenue

270

280

Notes Payable

10,000

300

J. Green, Capital

15,000

350

J. Green, Drawing

400

Lawn Cutting

Revenue

750

500

Wages Expense

200

510

Gas Expense

520

Advertising Expense

$26,070

Although dollar signs are not used in journals or ledger accounts, trial balances

generally include dollar signs next to the first figure in each column and next to each

column's total. Trial balances usually include accounts that had activity during the

accounting period but have a zero balance at the end of the period.

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Document Summary

After posting all transactions from an accounting period, accountants prepare a trial balance to verify that the total of all accounts with debit balances equals the total of all accounts with credit balances. The trial balance lists every open general ledger account by account number and provides separate debit and credit columns for entering account balances. The greener landscape group"s trial balance for april 30,20x2 appears below. The greener landscape group trial balance april 30,20x2. Although dollar signs are not used in journals or ledger accounts, trial balances generally include dollar signs next to the first figure in each column and next to each column"s total. Trial balances usually include accounts that had activity during the accounting period but have a zero balance at the end of the period. An error has occurred when total debits on a trial balance do not equal total credits. There are standard techniques for uncovering some of the errors that cause unequal trial balances.

Related Questions

(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

Check figures:

Cash Receipts Journal, total Cash DR: $ 70,348

Cash Payments Journal, total Cash CR: 62,060

Net Income: 25,218 Total Assets: 149,568

Total Post Closing Trial Balance: 151,193

Sun & Surf Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for Sun & Surf are indicated in the working papers. Below are a series of transactions for Sun & Surf Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 55% of the sales price.

Jan.3 Sell merchandise on account to M. Knast $5,100, invoice no. 825, and to C. Ryder $1,900, invoice no. 826.

5 Purchase merchandise from R. Drifter $5,000 and N. Sova $2,200, terms n/30.

7 Receive checks from V. Arnold $4,000 and I. Tan $2,000 after discount period has lapsed.

8 Pay freight on merchandise purchased $235.

9 Send checks to K. Xerxes for $9,000 less 2% cash discount, and to T. Caper for $11,000 less 1% cash discount.

9 Issue credit of $300 to C. Ryder for merchandise returned.

10 Summary daily cash sales total $15,500.

11 Sell merchandise on account to D. Gallagher $1,600, invoice no. 827, and to V. Arnold $900, invoice no. 828.

12 Pay rent of $1,000 for January.

13 Receive payment in full from M. Knast and C. Ryder less cash discounts.

15 Withdrawal of $800 cash by J. Sandy for personal use.

15 Post all entries to the subsidiary ledgers.

16 Purchase merchandise from T. Caper $18,000, terms 1/10, n/30; K. Xerxes $14,200, terms 2/10, n/30; and R. Drifter $1,500, terms n/30.

17 Pay $400 cash for office supplies.

18 Return $200 of merchandise to K. Xerxes and receive credit.

20 Summary daily cash sales total $20,100.

21 Issue $15,000 note, maturing in 90 days, to M. Griffen in payment of balance due.

21 Receive payment in full from V. Arnold less cash discount.

22 Sell merchandise on account to M. Knast $2,700, invoice no. 829, and to D. Gallagher $1,300, invoice no. 830.

22 Post all entries to the subsidiary ledgers.

23 Send checks to T. Caper and K. Xerxes in full payment less cash discounts.

25 Sell merchandise on account to I. Tan $3,500, invoice no. 831, and to C. Ryder $6,100, invoice no. 832.

27 Purchase merchandise from T. Caper $14,500, terms 1/10, n/30; N. Sova $1,200, terms n/30; and R. Drifter $5,400, terms n/30.

27 Post all entries to the subsidiary ledgers.

28 Pay $275 cash for office supplies.

31 Summary daily cash sales total $21,300.

31 Pay salaries and wages of $8,100. (continued)

Page 2 of 2

Instructions

(a) Record the January transactions in a sales journal, a single-column purchases journal, a cash receipts journal, a cash payments journal, and a two-column general journal.

(b) Post the journals to the general ledger.

(c) Prepare a trial balance at January 31, 2017, in the trial balance columns of the worksheet. Complete the worksheet using the following additional information.

1. Office supplies at January 31 total $900.

2. Insurance coverage expires on September 30, 2017.

3. Annual depreciation on the equipment is $1,500.

4. Interest of $50 has accrued on the note payable.

(f) Prepare a post-closing trial balance, and determine whether the subsidiary ledgers agree with the control accounts in the general ledger.

General Ledger
Cash					No. 101
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 37,150


Accounts Receivable					No. 112
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 13,000



Notes Receivable					No. 115
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 39,000
Inventory					No. 120
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 17,795







Office Supplies					No. 125
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 1,200


Prepaid Insurance					No. 130
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 2,205

Equipment					No. 157
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 6,450
Accumulated Depreciation - Equipment					No. 158
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 1,500

Notes Payable					No. 200
Date	Explanation	Ref.	Debit	Credit	Balance

Accounts Payable					No. 201
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 35,000




Interest Payable
Date	Explanation	Ref.	Debit	Credit	Balance

J. Sandy, Capital					No. 301
Date	Explanation	Ref.	Debit	Credit	Balance
Jan. 1	Balance	â			$ 80,300


J. Sandy, Drawing					No. 306
Date	Explanation	Ref.	Debit	Credit	Balance

Income Summary					No. 350
Date	Explanation	Ref.	Debit	Credit	Balance



Sales					No. 401
Date	Explanation	Ref.	Debit	Credit	Balance



Sales Returns and Allowances					No. 412
Date	Explanation	Ref.	Debit	Credit	Balance


Sales Discounts					No. 414
Date	Explanation	Ref.	Debit	Credit	Balance


Cost of Goods Sold					No. 505
Date	Explanation	Ref.	Debit	Credit	Balance




Salaries and Wages Expense					No. 627
Date	Explanation	Ref.	Debit	Credit	Balance


Depreciation Expense					No. 711
Date	Explanation	Ref.	Debit	Credit	Balance

Interest Expense					No. 718
Date	Explanation	Ref.	Debit	Credit	Balance


Insurance Expense					No. 722
Date	Explanation	Ref.	Debit	Credit	Balance


Office Supplies Expense					No. 728
Date	Explanation	Ref.	Debit	Credit	Balance


Rent Expense					No. 729
Date	Explanation	Ref.	Debit	Credit	Balance

peachgerbil35

PART ONE: The accounts in the ledger of Hickory FurnitureCompany as of December 31, 2016, are listed in alphabetical orderas follows. All accounts have normal balances. The balance of thecash account has been intentionally omitted. I AMMISSING CASH (DEBIT) and Debit TOTAL---only

Accounts Payable $ 42,880

Notes Payable $ 41,000

Accounts Receivable 115,430

Prepaid Insurance 20,400

Cash ?

Rent Expense 45,000

Common Stock 15,000

Retained Earnings 51,000

Dividends 22,500

Supplies 4,940

Fees Earned 746,050

Supplies Expense 6,070

Insurance Expense 3,100

Unearned Rent 13,200

Land 41,000

Utilities Expense 26,840

Miscellaneous Expense 9,900

Wages Expense 572,100

Prepare an unadjusted trial balance and insert the missingfigure for cash.

Hickory FurnitureCompany

UNADJUSTED TRIAL BALANCE

Score: 68/75

December 31,2016

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable	â
3	Supplies
4	Prepaid insurance	â
5	Land	â
6	Accounts Payable		â
7	Unearned Rent		â
8	Notes Payable		â
9	Common Stock		â
10	Retained Earnings		â
11	Dividends	â
12	Fees Earned		â
13	Wages Expense	â
14	Rent Expense	â
15	Utilities Expense	â
16	Supplies Expense	â
17	Insurance Expense	â
18	Miscellaneous Expense	â
19	Totals		â

PART TWO:

On July 24, it was discovered that the following errors tookplace in journalizing and posting transactions:

a.	Cash of $8,100 received on accountwas recorded as a debit to Fees Earned and a credit to Cash.
b.	A $1,560 purchase of supplies forcash was recorded as a debit to Supplies Expense and a credit toAccounts Payable.

Journalize the entries on July 24 to correct the errors. Use twotransactions to correct the error described in b. (That is, recordan entry to reverse the incorrect entry and a second entry torecord the correct entry.) Refer to the Chart of Accounts for exactwording of account titles.

JOURNAL

	DESCRIPTION	DEBIT
1		XXXX
2
3
4
5	XXXX	XXX
6	XXXX
7	XXXX

CHARTOF ACCOUNTS

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Supplies
14	Prepaid Rent
15	Land
16	Office Equipment
17	Automobiles

	LIABILITIES
21	Accounts Payable
22	Salaries Payable
23	Notes Payable

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends

	REVENUE
41	Fees Earned

	EXPENSES
51	Advertising Expense
52	Automobile Expense
53	Insurance Expense
54	Rent Expense
55	Salaries Expense
56	Supplies Expense
57	Utilities Expense
58	Miscellaneous Expense

orangedolphin170

(a) Record the January transactions in a sales journal.