In: Accounting
The Lexington Group has the following unadjusted trial balance as of May 31, 2018:
The Lexington Group
UNADJUSTED TRIAL BALANCE
May 31, 2018
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 |
Cash |
20,350.00 |
|
2 |
Accounts Receivable |
37,000.00 |
|
3 |
Supplies |
1,100.00 |
|
4 |
Prepaid Insurance |
200.00 |
|
5 |
Equipment |
171,175.00 |
|
6 |
Notes Payable |
36,000.00 |
|
7 |
Accounts Payable |
26,000.00 |
|
8 |
Common Stock |
50,000.00 |
|
9 |
Retained Earnings |
94,150.00 |
|
10 |
Dividends |
15,000.00 |
|
11 |
Fees Earned |
429,850.00 |
|
12 |
Wages Expense |
270,000.00 |
|
13 |
Rent Expense |
63,000.00 |
|
14 |
Advertising Expense |
25,200.00 |
|
15 |
Miscellaneous Expense |
5,100.00 |
|
16 |
Totals |
608,125.00 |
636,000.00 |
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. |
Required: | |
1. | Prepare a corrected unadjusted trial balance as of May 31, 2018. |
The Lexington Group
UNADJUSTED TRIAL BALANCE
Score: 0/67
May 31, 2018
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 |
Cash |
||
2 |
Accounts Receivable |
||
3 |
Supplies |
||
4 |
Prepaid Insurance |
||
5 |
Equipment |
||
6 |
Notes Payable |
||
7 |
Accounts Payable |
||
8 |
Common Stock |
||
9 |
Retained Earnings |
||
10 |
Dividends |
||
11 |
Fees Earned |
||
12 |
Wages Expense |
||
13 |
Rent Expense |
||
14 |
Advertising Expense |
||
15 |
Gas, Electricity, and Water Expense |
||
16 |
Miscellaneous Expense |
||
17 |
Totals |
The Lexington Group
UNADJUSTED TRIAL BALANCE
Score: 0/67
May 31, 2018
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1 |
Cash |
18,750 | |
2 |
Accounts Receivable |
53,500 | |
3 |
Supplies |
2,225 | |
4 |
Prepaid Insurance |
7,400 | |
5 |
Equipment |
171,175 | |
6 |
Notes Payable |
45,000 | |
7 |
Accounts Payable |
36,000 | |
8 |
Common Stock |
50,000 | |
9 |
Retained Earnings |
84,150 | |
10 |
Dividends |
15,000 | |
11 |
Fees Earned |
429,850 | |
12 |
Wages Expense |
270,000 | |
13 |
Rent Expense |
60,300 | |
14 |
Advertising Expense |
25,200 | |
15 |
Gas, Electricity, and Water Expense |
16,350 | |
16 |
Miscellaneous Expense |
5,100 | |
17 |
Totals |
645,000 | 645,000 |
i) Corrected cash balance = 20,350 - 7,000 + 5,400
= $18,750
ii) Corrected accounts receivable = 37,000 + 16,500
= $53,500
iii) Corrected supplies balance = 1,100 + 1,125
= $2,225
iv) Corrected prepaid insurance balance = 200 + 7,200 (Since $3,600 debit balance was posted as credit balance)
= $7,400
v) Corrected notes payable = 36,000 + 9,000
= $45,000
vi) Corrected accounts payable = 26,000 + 10,000
= $36,000
vii) Corrected retained earnings = 94,150 - 10,000 (Since a debit of $5,000 for dividends was posted as a credit to Retained Earnings)
= $84,150