Asked on 22 May 2020

The Colby Group has the following unadjusted trial balance as of August 31, 2019.

Collby Group
Unadjusted Trial Balance
August 31, 2019
Accounts Title Debit Credit
Cash $17,300  
Accounts Receivable $37,000  
Supplies $7,400  
Prepaid Insurance $1,900  
Equipment $196,000  
Notes Payable   $97,600
Accounts Payable   $26,000
Terry Collby, Capital   $129,150
Terry Collby, Drawings $56,000  
Fee Earned   $454,450
Wages Expense $270,000  
Rent Expense $51,800  
Advertising Expense $25,200  
Miscellaneous Expense $5,100  
Total $667,700 $707,200

The debit and credit totals are not equal as a result of the following errors:

a. The cash entered on the trial balance was understated by $6,000.

b. A cash receipt of $5,600 was posted as a debit to Cash of $6,500.

c. A debit of $11,000 to Accounts Receivable was not posted.

d. A return of $150 of defective supplies was erroneously posted as a $1,500 credit to Supplies.

e. An insurance policy acquired at a cost of $1,200 was posted as a credit to Prepaid Insurance.

f. The balance of Notes Payable was understated by $20,000.

g. A credit of $4,800 in Accounts Payable was overlooked when determining the balance of the account.

h. A debit of $7,000 for withdrawal by the owner was posted as a credit to Terry Colby, Capital.

i. The balance of $58,100 in Rent Expense was entered as $51,800 in the trial balance.

j. Gas, Electricity, and Water Expense, with a balance of $24,150, was omitted from the trial balance.

Required:

1. Prepare a corrected unadjusted trial balance as of August 31, 2019.

2. Does the fact that the unadjusted trial balance in (1) is balanced means that there are no errors in the accounts?

 

 

Answered on 22 May 2020

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