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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

CHALLENGE PROBLEM

Journal entries and a trial balance for Fred Phaler Consulting follow. As you will note, the trial balance does not balance, suggesting that there are errors. Recall that the chapter offers tips on identifying individual posting errors. These techniques are not as effective when there are two or more errors. Thus, you will need to first carefully inspect the trial balance to see if you can identify any obvious errors due to amounts that either look out of proportion or are simply reported in the wrong place. Then, you will need to carefully evaluate the other amounts by using the techniques offered in the text, or tracing the journal entries to the amounts reported on the trial balance. (Hint: Four errors were made in the posting process and preparation of the trial balance.)

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REQUIRED

1. Find the errors.

2. Explain what caused the errors.

3. Prepare a corrected trial balance.

1.& 2.

To determine

Find the error and explain the reason that caused the error.

Explanation

The error and the reason that caused the error are as follows:

  • June 12 – there is an occurrence of slide error as the automobile expense was debited by $50,000 instead of $50.
  • June 14 – Cash account was credited instead of accounts payable account...

3.

To determine

Prepare a corrected trial balance.

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