Question

The trial balance of Winter Co. does not balance:

WINTER CO. Trial Balance June 30, 2017
	Debit		Credit
Cash	$2,833
Accounts receivable	1,990
Supplies	532
Equipment			$7,875
Accounts payable			2,573
Unearned revenue	1,847
F. Winter, capital			11,221
F. Winter, drawings	801
Service revenue			3,475
Office expense	978
Salaries expense	2,977
	$11,958		$25,144

Your review of the ledger reveals that each account has a normal balance. You also discover the following errors:

1.		Cash received from a customer on account was debited to Cash for $860 and Accounts Receivable was credited for the same amount. The actual collection was $680.
2.		The purchase of supplies on account for $350 was recorded as a debit to Equipment for $350 and a credit to Accounts Payable for $350.
3.		Services of $860 were performed on account for a client. Accounts Receivable was debited for $86 and Service Revenue was credited for $860.
4.		A debit posting to Office Expense of $510 was not done.
5.		A payment on account for $605 was credited to Cash for $605 and debited to Accounts Payable for $506.
6.		The withdrawal of $390 cash for Winter’s personal use was debited to Salaries Expense for $390 and credited to Cash for $390.
7.		A transposition error (reversal of digits) was made when copying the balance in Service Revenue to the trial balance. The correct balance recorded in the account was $4,375.
8.		The general ledger contained a Prepaid Insurance account with a debit balance of $647.

Prepare a correct trial balance.

Answer 1

WINTER CO.
Trial Balance
June 30,2017
Account	Debit	credit
cash   [2833-180]	$2,653
Accounts receivable [1990+180+774]	$2,944
supplies [532+350]	$882
Prepaid Insurance	$647
Equipment [7875-350]	$7,525
Accounts payable   [2573-99]		$2,474
Unearned revenue		$1,847
F.winter capital		$11,221
F winer Drawings   [801+390]	$1,191
service revenue		$4,375
office expense   [978+510]	$1,488
salaries expense   [2977-390]	$2,587
Total	$19,917	$19,917
Notes-
1) cash was excess debited by 860-680=180 and accounts receivable is credited by 180 so cash is decreased by 180 and receivables are increased by 180.
2)supplies are increased by 350 and equipment are decreased by 350
3)accounts receivable are credited by 860-86 =774 as they are less debited
4)office expense are increased by 510
5)accounts payable are debited by remaining amount 605-506=99
6)Drawing are increased by 390 and salaries are decreased by 390
7)revenue is corrected to 4375
8) Prepaid Insurance account with a debit balance of 647 is added.