The following trial balance of Oakley Co. does not balance. Each of the listed a

Question

The following trial balance of Oakley Co. does not balance.

Each of the listed accounts should have a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors.

Prepare a correct trial balance. (Note: It may be necessary to add one or more accounts to the trial balance.)

OAKLEY CO.
TRIAL BALANCE
JUNE 30, 2012 Debit Credit Cash $3,253 Accounts Receivable $3,614 Supplies 1,183 Equipment 4,183 Accounts Payable 3,049 Unearned Service Revenue 1,583 Common Stock 6,383 Retained Earnings 3,383 Service Revenue 2,763 Salaries and Wages Expense 3,783 Office Expense 1,323    $15,669 $18,831

Explanation / Answer

Alright, here we go:

First of all, because the problem says all accounts have normal balances, we must flip-flop cash and unearned service revenue.

1.       We must correct the accounts affected by this transposition error by debiting cash for the difference of 730 and 370, and also crediting this amount to accounts receivable.

730

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