E3-2 (Corrected Trial Balance) The trial balance of Wanda Landowska Company (sho
ID: 2599838 • Letter: E
Question
E3-2 (Corrected Trial Balance) The trial balance of Wanda Landowska Company (shown on the next page) does not balance. Your review of the ledger reveals the following. (a) Each account had a normal balance. (b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100. (c) A transposition error was made in Accounts Receivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690, respectively. (d) A debit posting to Advertising Expense of $300 was omitted. (e) A $1,500 cash drawing by the owner was debited to Owner’s Capital and credited to Cash.
WANDA LANDOWSKA COMPANY
TRIAL BALANCE
APRIL 30, 2014
Debit Credit
Cash $ 4,800 (D)
Accounts Receivable 2,570(D)
Prepaid Insurance 700(D)
Equipment $ 8,000(C)
Accounts Payable 4,500 (C)
Property Taxes Payable 560(D)
Owner’s Capital 11,200(C)
Service Revenue 6,960(D)
Salaries and Wages Expense 4,200(D)
Advertising Expense 1,100(D)
Property Tax Expense 800(D)
$20,890 $24,500
Explanation / Answer
Prepare a corrected trial balance as follows:
Notes:
(b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100 means Prepaid Insurance and Property Tax Expense were understated by $100 and Accounts Payable was overstated by $100.
(e) A $1,500 cash drawing by the owner should be debited to Owner's Drawings instead of Owner's Capital.
W L COMPANY Trial Balance April 30, 2014 Debit Credit Cash 4800 Accounts receivable 2750 Prepaid insurance (700 + 100) 800 Equipment 8000 Accounts payable (4500 - 100) 4400 Property taxes payable 560 Owner's capital (11,200 + 1500) 12700 Owner's drawings 1500 Service revenue 6690 Salaries and wages expense 4200 Advertising expense (1,100 + 300) 1400 Property tax expense (800 + 100) 900 Total 24350 24350Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.