The trial balance of Smart Tots Child Care does not balance. (Click the icon to

Question

The trial balance of Smart Tots Child Care does not balance. (Click the icon to view the trial balance.) The following errors are detected: (Click the icon to view the errors.) Prepare the corrected trial balance as of August 31, 2017. Journal entries are not required. 1 More Info a. Cash is understated by $1,700. b. A S4,700 debit to Accounts Receivable was posted as a credit. c. A S800 purchase of office supplies on account was neither journalized nor posted d. Equipment was incorrectly transferred from the ledger as $89,900. It should have been transferred as $82,000. e. Salaries Expense is overstated by $100. f. A S700 cash payment for advertising expense was neither journalized nor posted g. A $150 owner's withdrawal of cash was incorrectly journalized as $1,500 h. Service Revenue was understated by $4,600. i. A 12-month insurance policy was posted as a $1,500 credit to Prepaid Insurance. Cash was posted correctly Print Done

Explanation / Answer

Solution :- Corrected Trial Balance

Notes :-  i). Accounts receivable = 4700 * 2

= $ 9400.

ii). Equipment (overstated) = 89900 - 82000

= $ 7900.

iii). Drawings (Overstated) = 1500 - 150 = 1350.

Account Title Debit ($) Credit ($) Cash 1500 Office supplies   800 Accounts Receivable 9400 Equipment (Overstated) 7900 Prepaid insurance   1500 Advertising expense   700 Salary expense (Overstated)   50 Service Revenue 4600 Drawings (Overstated) 1350 Total 13900 13900

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