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View Full Version : Solving this Accounting homework.


RafaelCB
Aug 27, 2009, 05:44 PM
I HAVE TRIED BUT I CAN'T GET IT RIGHT! :(
THIS IS THE EXACT PROBLEM I HAVE TO SOLVE, I COPIED EXACTLY WHAT THE BOOK IS GIVING ME!

The trial balance of the Sterling Company shown below does not balance.



Sterling Company
Trial Balance
May 31, 2010
********************************DEBIT***********CR EDIT

Cash--------------------------------------$5,850
Accounts Receivable---------------------------------------------2,750
Prepaid Insurance-------------------------700
Equipment-------------------------------- 8,000
Accounts Payable------------------------------------------------4,500
Property Taxes Payable------------------560
M. Sterling, Capital--------------------------------------- -----11,700
Service Revenue-------------------------6,690
Salaries Expense------------------------4,200
Advertising Expense---------------------------------------------1,100
Property Tax Expense-------------------800
*******************************-------************-----------
*******************************$26,800**********$2 0,050
*******************************-------************----------
*******************************-------*************----------

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

1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense
Were each understated $100.

2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made,
The correct balance were $2,570 and $6,960, respectively.

3. A debit posting to Salaries Expense of $200 was omitted.

4. A $1,000 cash drawing by the owner was debited to M. Sterling, Capital for $1,000 and credited to Cash
For $1,000.

5. A $520 purchase of supplies on account was debited to Equipment for $520 and credited to
Cash for $520

6. A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited
To Cash for $45.

7. A collection from a customer for $210 was debited to Cash for $210 and credited to Accounts
Payable for $210.

Instructions:
Prepare a correct trial balance. Note that the chart of accounts includes the following:
M. Sterling, Drawing; and Supplies.(Hint: It helps to prepare the correct journal entry for the transaction described and compare it to the mistake done.)

Trial Balance should total $24,930.

morgaine300
Aug 27, 2009, 08:05 PM
Please show the work you have tried on the problem first. Then someone can check over what you've tried to do. Also, can you please verify that the trial balance you show here is exactly the way it was given, like for instance a credit for acct receivable.

Since it's a "correction" problem, it's likely meant to be messed up like that, but I just want to check.

You might want to present your work in Excel and upload it, to make it easier to read and see what you're doing.