Corrected trial balance The Lexington Group has the following unadjusted trial balance as of May 31, 2018: The Lexington Group Unadjusted Trial Balance May 31, 2018 Debit Balances Credit Balances Cash 20,350 Accounts Receivable 37,000 Supplies 1,100 Prepaid Insurance 200 Equipment 171,175 Notes Payable 36,000 Accounts Payable 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000 The debit and credit totals are not equal as a result of the following errors: A. The cash entered on the trial balance was overstated by $7,000. B. A cash receipt of $8,200 was posted as a debit to Cash of $2,800. C. A debit of $ 16,500 to Accounts Receivable was not posted. D. A return of $125 of defective supplies was erroneously posted as a $1,250 credit to Supplies. E. An insurance policy acquired at a cost of $3,600 was posted as a credit to Prepaid Insurance. F. The balance of Notes Payable was understated by $9,000. G. A credit of $10,000 in Accounts Payable was overlooked when determining the balance of the account. H. A debit of $5,000 for dividends was posted as a credit to Retained Earnings. I. The balance of $60,300 in Rent Expense was entered as $63,000 in the trial balance. J. Gas, Electricity, and Water Expense, with a balance of $16,350, was omitted from the trial balance. Instructions 1. Prepare a corrected unadjusted trial balance as of May 31, 2018. 2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.

BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207
BuyFind

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207

Solutions

Chapter
Section
Chapter 2, Problem 2.5APR
Textbook Problem

Corrected trial balance

The Lexington Group has the following unadjusted trial balance as of May 31, 2018:

The Lexington Group Unadjusted Trial Balance May 31, 2018
  Debit Balances Credit Balances
Cash 20,350  
Accounts Receivable 37,000  
Supplies 1,100  
Prepaid Insurance 200  
Equipment 171,175  
Notes Payable   36,000
Accounts Payable   26,000
Common Stock   50,000
Retained Earnings   94,150
Dividends 15,000  
Fees Earned   429,850
Wages Expense 270,000  
Rent Expense 63,000  
Advertising Expense 25,200  
Miscellaneous Expense 5,100  
  608,125 636,000

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

  • A. The cash entered on the trial balance was overstated by $7,000.
  • B. A cash receipt of $8,200 was posted as a debit to Cash of $2,800.
  • C. A debit of $ 16,500 to Accounts Receivable was not posted.
  • D. A return of $125 of defective supplies was erroneously posted as a $1,250 credit to Supplies.
  • E. An insurance policy acquired at a cost of $3,600 was posted as a credit to Prepaid Insurance.
  • F. The balance of Notes Payable was understated by $9,000.
  • G. A credit of $10,000 in Accounts Payable was overlooked when determining the balance of the account.
  • H. A debit of $5,000 for dividends was posted as a credit to Retained Earnings.
  • I. The balance of $60,300 in Rent Expense was entered as $63,000 in the trial balance.
  • J. Gas, Electricity, and Water Expense, with a balance of $16,350, was omitted from the trial balance.

Instructions

  1. 1. Prepare a corrected unadjusted trial balance as of May 31, 2018.
  2. 2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.

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Chapter 2 Solutions

Financial & Managerial Accounting
Ch. 2 - Rules of debit and credit and normal balances...Ch. 2 - Journal entry for asset purchase Prepare a journal...Ch. 2 - Journal entry for fees earned Prepare a journal...Ch. 2 - Journal entry for dividends Prepare a journal...Ch. 2 - Missing amount from an account On August 1, the...Ch. 2 - Trial balance errors For each of the following...Ch. 2 - Correcting entries The following errors took place...Ch. 2 - Chart of accounts The following accounts appeared...Ch. 2 - Chart of accounts Innerscape Interiors is owned...Ch. 2 - Chart of accounts LeadCo School is a newly...Ch. 2 - Rules of debit and credit The following table...Ch. 2 - Normal entries for accounts During the month,...Ch. 2 - Normal balances of accounts Identify each of the...Ch. 2 - Transactions Zenith Consulting Co. has the...Ch. 2 - Journalizing and posting On October 3, 2018, Regal...Ch. 2 - Transactions and T accounts The following selected...Ch. 2 - Cash account balance During the month, Warwick Co....Ch. 2 - Account balances A. During February, 186,500 was...Ch. 2 - Retained earnings account balance As of January 1,...Ch. 2 - Identifying transactions Napa Tours Co. is a...Ch. 2 - Journal entries Based upon the T accounts in...Ch. 2 - Trial balance Based upon the data presented in...Ch. 2 - Trial balance The accounts in the ledger of...Ch. 2 - Effect of errors on trial balance Indicate which...Ch. 2 - Errors in trial balance The following preliminary...Ch. 2 - Effect of errors on trial balance The following...Ch. 2 - Errors in trial balance Identify the errors in the...Ch. 2 - Entries to correct errors The following errors...Ch. 2 - Entries to correct errors The following errors...Ch. 2 - Entries into T accounts and trial balance Marjorie...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance On November 1,...Ch. 2 - Journal entries and trial balance Elite Realty...Ch. 2 - Corrected trial balance The Lexington Group has...Ch. 2 - Entries into T accounts and trial balance Ken...Ch. 2 - Journal entries and trial balance On August 1,...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance Valley Realty...Ch. 2 - Corrected trial balance Tech Support Services has...Ch. 2 - The transactions completed by PS Music during June...Ch. 2 - Continuing Company AnalysisAmazon: Horizontal...Ch. 2 - Chipotle: Horizontal analysis Chipotle Mexican...Ch. 2 - Target: Horizontal analysis The following data (in...Ch. 2 - Walmart: Horizontal analysis The following data...Ch. 2 - Ethics in Action Buddy Dupree is the accounting...

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