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The following preliminary unadjusted trial balance of Ranger Co., a sports ticket agency, does not balance: When the ledger and other records are reviewed, you discover the following: (1) the debits and credits in the cash account total $77,600 and $62,100, respectively; (2) a billing of $9,000 to a customer on account was not posted to the accounts receivable account; (3) a payment of $4,500 made to a creditor on account was not posted to the accounts payable account; (4) the balance of the unearned rent account is $5,400; (5) the correct balance of the equipment account is $190,000; and (6) each account has a normal balance. Prepare a corrected unadjusted trial balance.

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Financial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305088436

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BuyFindarrow_forward

Financial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305088436
Chapter 2, Problem 18E
Textbook Problem
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The following preliminary unadjusted trial balance of Ranger Co., a sports ticket agency, does not balance:

Chapter 2, Problem 18E, The following preliminary unadjusted trial balance of Ranger Co., a sports ticket agency, does not

When the ledger and other records are reviewed, you discover the following: (1) the debits and credits in the cash account total $77,600 and $62,100, respectively; (2) a billing of $9,000 to a customer on account was not posted to the accounts receivable account; (3) a payment of $4,500 made to a creditor on account was not posted to the accounts payable account; (4) the balance of the unearned rent account is $5,400; (5) the correct balance of the equipment account is $190,000; and (6) each account has a normal balance.

Prepare a corrected unadjusted trial balance.

To determine

Prepare a corrected unadjusted trial balance for Company R.

Explanation of Solution

Trial balance:

A trial balance is the summary of all the ledger accounts. The trial balance is prepared to check the total balance of the debit column with the total of the balance of the credit column, which must be equal. The trial balance is usually prepared to check accuracy of ledger balances, and before the preparation of financial statements.

Unadjusted trial balance:

The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making adjusting journal entries.

The unadjusted trial balance for Company R for August 31, 2019 is as follows:

Company R
Unadjusted trial balance
August 31, 2019
ParticularsDebit $Credit $
Cash15,500 
Accounts receivable46,750 
Prepaid insurance12,000 
Equipment190,000 
Accounts payable 26,600
Unearned rent 5,400
Capital 110,000
Drawings13,000 
Fees earned 385,000
Wages expenses213,000
Advertising expenses16,350
Miscellaneous expense18,400
 525,000525,000

Table (1)

Working notes:

  1. 1. Working note for correct cash balance:

  Correct cash balance = (Amount of cash in debit balance -amount of cash in credit balance)=($77,600$62,100)=$15,500

  1. 2

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