ACC120 Study Guide - Final Guide: Deferral, Accounts Payable, Accounts Receivable
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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 | Ā |
Accounts Receivable | $37,000 | Ā |
Supplies | $7,400 | Ā |
Prepaid Insurance | $1,900 | Ā |
Equipment | $196,000 | Ā |
Notes Payable | Ā | $97,600 |
Accounts Payable | Ā | $26,000 |
Terry Collby, Capital | Ā | $129,150 |
Terry Collby, Drawings | $56,000 | Ā |
Fee Earned | Ā | $454,450 |
Wages Expense | $270,000 | Ā |
Rent Expense | $51,800 | Ā |
Advertising Expense | $25,200 | Ā |
Miscellaneous Expense | $5,100 | Ā |
Total | $667,700 | $707,200 |
The debit and credit totals are not equal as a result of the following errors:
a.Ā 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.Ā A debit of $11,000 to Accounts Receivable was not posted.
d.Ā A return of $150 of defective supplies was erroneously posted as a $1,500 credit to Supplies.
e.Ā An insurance policy acquired at a cost of $1,200 was posted as a credit to Prepaid Insurance.
f.Ā The balance of Notes Payable was understated by $20,000.
g.Ā A credit of $4,800 in Accounts Payable was overlooked when determining the balance of the account.
h.Ā A debit of $7,000 for withdrawal by the owner was posted as a credit to Terry Colby, Capital.
i.Ā The balance of $58,100 in Rent Expense was entered as $51,800 in the trial balance.
j.Ā Gas, Electricity, and Water Expense, with a balance of $24,150, was omitted from the trial balance.
Required:
1.Ā Prepare a corrected unadjusted trial balance as of August 31, 2019.
2.Ā Does the fact that the unadjusted trial balance in (1) is balanced means that there are no errors in the accounts?
Ā
Ā
For each item described: Identify the type of account (Asset,Liability, Equity, Revenue or Gain, Expense or Loss), normalbalance (Debit, Credit), financial statement (Balance Sheet, IncomeStatement), and whether the account is closed at the end of theperiod (Yes, No) by selecting the letter that best describes thoseattributes. If an account is a contra account, the answer will showthe account type in parentheses. Answer items may beused once, more than once, or not at all.
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expenses are overstated and assets are overstated expenses are understated and owners' equity is overstated net income is overstated and owners' equity isunderstated |
$91,550 $88,150 $87,200 |
It represents the wear and tear from use and from the effects ofweather It occurs when the asset is no longer able to provide services atthe level for which it was intended. It represents the decline in market value of an asset. |
$15,000 $3,750 $6,500 |
Yes, Yes, Yes, Yes Yes, No, No, Yes No, Yes, Yes, No |
$15,000 $12,500 Cannot be determined from the information given |
decrease in Delivery Truck for $11,500 increase in a loss for $6,500 increase in a gain for $6,500 |
$1,875,000 $3,750,000 $2,500,000 |
increase in research and development expense for $670,000 decrease in Patent for $83,750 increase in Accumulated Amortization for $670,000 |
must be shown on the face of the balance sheet by class of fixedasset. are normally shown under the caption of property, plant andequipment must be shown on the face of the balance sheet by class of fixedasset and are shown at their book value or at their fair marketvalue, whichever is lower. |