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23 Nov 2019

E3-2 (Corrected Trial Balance) The trial balance of WandaLandowska Company (shown on the next page) does not balance. Yourreview of the ledger reveals the following. (a) Each account had anormal balance. (b) The debit footings in Prepaid Insurance,Accounts Payable, and Property Tax Expense were each understated$100. (c) A transposition error was made in Accounts Receivable andService Revenue; the correct balances for Accounts Receivable andService Revenue are $2,750 and $6,690, respectively. (d) A debitposting to Advertising Expense of $300 was omitted. (e) A $1,500cash drawing by the owner was debited to Owner’s Capital andcredited to Cash.

WANDA LANDOWSKA COMPANY
TRIAL BALANCE
APRIL 30, 2014
Debit Credit
Cash $ 4,800 (D)

Accounts Receivable 2,570(D)
Prepaid Insurance 700(D)
Equipment $ 8,000(C)
Accounts Payable 4,500 (C)
Property Taxes Payable 560(D)

Owner’s Capital 11,200(C)
Service Revenue 6,960(D)
Salaries and Wages Expense 4,200(D)
Advertising Expense 1,100(D)
Property Tax Expense 800(D)
$20,890 $24,500

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Hubert Koch
Hubert KochLv2
18 May 2019
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Related questions

The trial balance of Dominic Company shown below does notbalance.

DOMINIC COMPANY
Trial Balance
May 31, 2015

Debit

Credit

Cash

 $5,840
Accounts Receivable $2,730
Prepaid Insurance 810
Equipment 13,990
Accounts Payable 6,490
Unearned Service Revenue 670
Common Stock 13,690
Service Revenue 8,670
Salaries and Wages Expense 4,310
Advertising Expense 990
Utilities Expense

800

$35,090

$23,900


Your review of the ledger reveals that each account has a normalbalance. You also discover the following errors.

1. The totals of the debit sides of Prepaid Insurance, AccountsPayable, and Utilities Expense were each understated $100.
2. Transposition errors were made in Accounts Receivable andService Revenue. Based on postings made, the correct balances were$2,370 and $8,760, respectively.
3. A debit posting to Salaries and Wages Expense of $200 wasomitted.
4. A $1,100 cash dividend was debited to Common Stock for $1,100and credited to Cash for $1,100.
5. A $460 purchase of supplies on account was debited to Equipmentfor $460 and credited to Cash for $460.
6. A cash payment of $490 for advertising was debited toAdvertising Expense for $49 and credited to Cash for $49.
7. A collection from a customer for $460 was debited to Cash for$460 and credited to Accounts Payable for $460.


Prepare a correct trial balance. (Hint: It helps toprepare the correct journal entry for the transaction described andcompare it to the mistake made.)

 

The trial balance of the Mukhtar Company shown below does not balance.

Mukhtar Company

Trial Balance

September 30, 2019

Debit                           Credit

Cash $                                                 3,850

Accounts Receivable                                                              $ 2,750

Prepaid Insurance                               700

Equipment                                           12,000

Accounts Payable                                                                   4,500

Unearned Service Revenue                 560

Common Stock                                                                       11,700

Service Revenue                                 8,690

Salaries and Wages Expense               4,200

Advertising Expense                                                               1,100

Utilities Expense                                 800

$30,800                       $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 Utilities 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 $8,960, respectively.
  3. A debit posting to Salaries and Wages Expense of $200 was omitted.
  4. A $1,000 cash dividend was debited to Common Stock 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 $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45.
  7. A collection from a customer for $420 was debited to Cash for $420 and credited to Accounts Payable for $420.

 

Instructions

  1. Prepare a correct trial balance. Note that the chart of accounts includes the following:

Dividends and Supplies.

  1. Make T accounts and post the corrections in these accounts to reach the corrected trial balance

ANEOHE RENOVATIONS Unadjusted Trial Balance December 31, 2015Cash $4,000
 Accounts receivable 1,800
 Construction supplies1,360
 Prepaid insurance 1,940
 Investment in Sierra, Inc., commonshares (long-term) 8,000
 Trucks 38,000
 Accumulated depreciation,trucks $15,000
 Construction equipment 6,400
 Accumulateddepreciation, construction equipment 2,300
 Building 103,000
Accumulated depreciation, building 38,600
 Land 24,000
 Franchise35,000
 Unearned renovation service revenue 1,950
 Notes payable,long term 83,400
 Capital 66,075
 Drawings 32,000
 Renovationarchitecture fees 14,800
 Renovation services revenue 96,000
 Gas,oil, and repairs expense 4,825
 Interest expense 7,650
 Renovationwages expense 34,050
 Office salaries expense 16,100 
 TOTAL$318,125 $318,125 REQUIRED: (1) Set-up the T-ACCTS for the items inthe trial balance above plus these additional accounts: WagesPayable Depreciation Expense, Building Depreciation Expense,Construction Equipment Depreciation Expense, Trucks InsuranceExpense Construction Supplies Expense Enter the trial balanceamounts in the T-ACCTS. (2) Use the information that follows toprepare and record adjusting journal entries. (a) Insurancepremiums of $1,115 expired during the year. (b) An inventory countshows $1,232 of unused construction supplies on hand. (c)Depreciation on the construction equipment, $1,625. (d)Depreciation on the trucks, $9,400. (e) Depreciation on thebuilding, $4,900. (f) Of the $1,950 balance in the UnearnedRenovation Service Revenue account, $725 was earned by theyear-end. (g) Accrued renovation architecture fees earned butunrecorded at year-end totaled $2,100. (h) There were $960 ofearned but unrecorded wages for an employee at the year-end. (3)Post the adjusting entries to T-Accounts. (4) Prepare an adjustedtrial balance. (5) In good form, prepare an income statement, astatement of owner’s equity, and a classified balance sheet. A$10,400 installment on the long-term note payable is due within oneyear. KEY NUMBERS: Balance Construction Supplies $ 1,232
BalancePrepaid Insurance 825
Balance Unearned Renovation Architecture Fees1,225
Balance Renovation Architecture Fees Earned 16,900
BalanceRenovation Wages Expense 35,010
Total debit column Trial Balance337,110
Net Income 32,872
Total Assets 152,532
Total CurrentLiabilities 12,585

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