Tech Support Services has the following unadjusted trial balance as of December

Question

Tech Support Services has the following unadjusted trial balance as of December 31, 2017 Cash        25,550 Accounts receivable        44,050 Supplies          6,660 Prepaid insurance          3,600 Equipment      162,000 Notes payable     75,000 Accounts payable     13,200 Johnny Tremain, Capital 101,850 Johnny Tremain, Drawings        33,000 Fee revenue 534,000 Wages expense      306,000 Rent expense        62,550 Advertising expense        23,850 Utilities expense        17,000      684,260 724,050 The following errors are reflected in the trial balance: a) The cash entered on the trial balance was overstated by $8,000. b) A cash receipt of $4,100 was posted as a debit to Cash of $1,400. c) A debit of $12,350 to Accounts Receivable was not posted. d) A return of $235 of defective supplies was erroneously posted as a $325 credit to Supplies. e) An insurance policy acquired at a cost of $3,000 was posted as a credit co Prepaid insurance. f) The balance of Notes Payable was overstated by $21,000. g) A credit of $3,450 in Accounts payable was overlooked when the balance of the account was determined. h) A debit of $6,000 for a withdrawal by the owner was posted as a debit to the Capital account. i) The balance of $28,350 in Advertising expense is entered as $23,850 in the trial balance. j) Miscellaneous expense with a balance of $4,600 was omitted from the trial balance. Instructions: Prepare a corrected unadjusted trial balance as of December 31, 2017. Tech Support Services has the following unadjusted trial balance as of December 31, 2017 Cash        25,550 Accounts receivable        44,050 Supplies          6,660 Prepaid insurance          3,600 Equipment      162,000 Notes payable     75,000 Accounts payable     13,200 Johnny Tremain, Capital 101,850 Johnny Tremain, Drawings        33,000 Fee revenue 534,000 Wages expense      306,000 Rent expense        62,550 Advertising expense        23,850 Utilities expense        17,000      684,260 724,050 The following errors are reflected in the trial balance: a) The cash entered on the trial balance was overstated by $8,000. b) A cash receipt of $4,100 was posted as a debit to Cash of $1,400. c) A debit of $12,350 to Accounts Receivable was not posted. d) A return of $235 of defective supplies was erroneously posted as a $325 credit to Supplies. e) An insurance policy acquired at a cost of $3,000 was posted as a credit co Prepaid insurance. f) The balance of Notes Payable was overstated by $21,000. g) A credit of $3,450 in Accounts payable was overlooked when the balance of the account was determined. h) A debit of $6,000 for a withdrawal by the owner was posted as a debit to the Capital account. i) The balance of $28,350 in Advertising expense is entered as $23,850 in the trial balance. j) Miscellaneous expense with a balance of $4,600 was omitted from the trial balance. Instructions: Prepare a corrected unadjusted trial balance as of December 31, 2017.

Explanation / Answer

Tech Support services Unadjuste Trial Balance December 31st,2017 Trial Balance Rectification Correct Balance Particular Debit Credit Debit Credit Cash($25,550-$8000+$2700) 25550 2700 8000 20250 Accounts Receivable=($44050+$12350 44050 12350 56400 Supplies=($6660+$90) 6660 90 6750 Prepaid Insurance($3600+3000+3000) 3600 6000 9600 Equipment 162000 162000 Notes Payable=($75000-$21000) 75000 21000 54000 Accounts Payable=($13200+$3450) 13200 3450 16650 Johnny Tremain,Capital=($101850+$6000) 101850 6000 107850 Johnny Tremain,Drawings=($33000+$6000) 33000 6000 39000 Fee Revenue 534000 534000 Wages Expense 306000 306000 Rent Expense 62550 62550 Advertising Expense=(23850+$4500) 23850 4500 28350 Utilities Expense 17000 17000 Miscellaneous Expenses=$4600 4600 4600 Total 684260 724050 57240 17450 712500 712500 Explaination a) Cash Balance Overstated so we reduce cash by $8000 b) A Cash less recorded by($4100-$1400)=$2700 so we add $2700 in Cash C ) $12350 added in Accounts Receivable which is not recorded earlier. d) A return of supplies more credited in supplies account by(325-235) =$90 so we add this amount in Supplies. e) Insurance policy was purchased by 3000 was wrongly credited instead of debiting,so first we rectify it and then passed correct entry. f) Note payable overstated by $21000 so reduced the balance of Note Payable. g) A credit of $3450 overlooked while recording,so we add this amount in accounts Payable. h) Withdrawal of 6000 entered in capital account so we increase the debit balance by drawings and increase capital which is wrongly debited. i) An advertisement expenses wrogly less debited by $4500 so we add this amount. j) Miscellaneous Expenses earlier not recorded so we include this amount as Miscellaneos Expenses.

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