Concept explainers
A trial balance is the summary of all the ledger accounts. The trial balance is prepared to check the total balance of the debit 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. In trial balance the debit balances are recorded in the left column, and credit balances are recorded in the right column.
To prepare: The Correct trial balance of W Company as on June 30, 2017.
Answer to Problem 3.7AP
Answer:
Preparea correct trial balance of W Company as on June 30, 2017 as follows:
W Company | ||
Trial balance | ||
June 30,2017 | ||
Debit ($) | Credit ($) | |
Cash (a) | 3,180 | |
| 3,910 | |
Supplies (c) | 460 | |
Equipment (d) | 3,340 | |
Accounts Payable (f) | 3,220 | |
Unearned Service Revenue | 1,200 | |
Common Stock | 9,000 | |
Dividend (g) | 1,400 | |
Service Revenue | 3,480 | |
Salaries and wages Expense (e) | 3,700 | |
utilities expense | 910 | |
Total | $16,900 | $16,900 |
Table-1
Explanation of Solution
Working note for correct cash balance:
Inerror -1, the normal balance for cash is debit but credit balance is given. The cash received from customer on account is debited in cash account, and credited in accounts receivable for $780 instead of $870. This understates the cash balance recorded in trial balance. Hence, it is to be adjusted for $3,180.
Determine correct accounts receivable balance:
Inerror -1, the amount of cash received from customer on account is credited in accounts receivable for $780 instead of $870. This understates the accounts receivable balance recorded in trial balance. Hence, this error is to be adjusted for $90.
Inerror -3, the accounts receivable is debited for $90 instead of $900. This understates the accounts receivable balance recorded in trial balance. Hence, it is to be adjusted for $810.
Determine correct supplies balance:
Inerror -2, the purchase of equipment (printer) is debited to supplies account instead of debiting it to equipment account. This overstates the supplies balance recorded in trial balance. Hence, this error is to be adjusted for $340.
Determine correct Equipment balance:
Inerror -2, the purchase of equipment (printer) is debited to supplies account instead of debiting it to equipment account. This understates the Equipment balance recorded in trial balance. Hence, this error is to be adjusted for $340.
Determine correct salaries and wages expense balance:
Inerror -4, the debit posting to salaries and wages expense was omitted. This understates the salaries and wages expense balance recorded in trial balance. Hence, this error is to be adjusted for $700.
Inerror -6, the debit posting of cash dividend was debited to salaries and wages expense. This overstates the salaries and wages expense balance recorded in trial balance. Hence, this error is to be adjusted for $600.
Determine correct accounts payable balance:
Inerror -5, the payment on account was credited to account payable account, which should be debited. This overstates the account payable balance recorded in trial balance. Hence, this error is to be adjusted for $ 206.
Determine correct dividend balance:
Inerror -6, the payment of cash dividend was debited to salaries and wages account. This understates the dividend balance recorded in trial balance. Hence, this error is to be adjusted for $600.
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Chapter 3 Solutions
FINANCIAL ACCT.:TOOLS...(LL)-W/ACCESS
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