Ask Me Help Desk - Prepare a Correct Trial Balance.

Dear AskMeHelpDesk Community !
This is my first post ever since I found this site is so helpful for everything which I concern. Thanks for everyone who has been contributing to this community.

Actually I can do most of my accounting homeworks, I can do the journal, ledger, prepare the trial balance, income statement... But I found myself difficulty when every time I attempt to correct an unbalance Trial Balance. It makes me confuse somehow, I knows I am getting there, but it's like I don't know where I am wrong.

And here is the problem, I appreciate for any helps or advice, you don;'t have to reply the whole thing, just let me know what I have to do.

The trial balance of Ron Salem Co, shown below does not balance

http://www.vietstream.com/images/private/scan0001.jpg

So what I know is Cash should be on Debit side, Unearned Revenue should be on Credit side.

Each of the listed accounts has a normal balance per the general ledger. An Examination of the ledger and journal reveals the following errors:

1/ Cash received from a customer in payment of its account was debit for 570, and accounts Receivable was credit for the same amount. The actual collection was for 750
--> So I know we should debit 750 to Cash instead of 570 and credit to Accounts Receivable 750 instead of 570. Is it rite, if yes, what should I do next?

2/ The purchase of a typewriter on account for 340 was record as a debit to Supplies for 340 and a credit to Accounts Payable for 340
--> So I should correct it to Debit to Equipments 340 and Credit to Accounts Payable for 340, what should I do next?

3/ Services were performed on account for a client for 890. Accounts Receivable was debited for 890 and Service Revenue was credited for 89
--> Service Revenue should be credited for 890, the difference is 801$, what happen now, what can I do with this number?

4/ A debit posting to Salaries Expense of 367 was omitted.
--> So I have to add up 367$ to Salaries Expense account, rite?

5/ A payment of a balance due for 309 was credit to cash for 309 and credit to Accounts Payable for 390.
--> It should be Credited to Cash for 309 and Debited to Account Payable for 309, what should I do now?

6/ The withdrawal of 500 cash for Salem Personal use was debit to Salaries Expense for 500 cash and credit to cash for 500.
--> It should be debited to Salem Drawing for 500 and credited to Cash for 500, rite ?

So what is the correct Trial Balance? Can anyone help me? I really appreciate for any helps.
Thanks in advance.

Quote:

Originally Posted by Kevin5286

So what I know is Cash should be on Debit side, Unearned Revenue should be on Credit side.

I agree with that.

Quote:

Originally Posted by Kevin5286

1/ Cash received from a customer in payment of its account was debit for 570, and accounts Receivable was credit for the same amount. The actual collection was for 750
--> So I know we should debit 750 to Cash instead of 570 and credit to Accounts Receivable 750 instead of 570. Is it rite, if yes, what should I do next?

Yes, that is right.

So, since only 570 was done, the other 750-570 = $180 should be added

Dr. Cash 180
Cr. AR 180

Quote:

Originally Posted by Kevin5286

2/ The purchase of a typewriter on account for 340 was record as a debit to Supplies for 340 and a credit to Accounts Payable for 340
--> So I should correct it to Debit to Equipments 340 and Credit to Accounts Payable for 340, what should I do next?

Originally, what was done was:
Dr. Supplies 340
Cr. Accounts Payable 340

What should have been done was
Dr. Equipment 340
Cr. Accounts Payable 340

As you can see, no adjustment needs to be made to AP, since it was done properly

So, you need to:
Dr. Equipment 340
Cr. Supplies 340 (to get rid of the original wrong Journal Entry)

Quote:

Originally Posted by Kevin5286

3/ Services were performed on account for a client for 890. Accounts Receivable was debited for 890 and Service Revenue was credited for 89
--> Service Revenue should be credited for 890, the difference is 801$, what happen now, what can I do with this number?

You are correct.
So, the original was JE was:
DR. AR 890
Cr. Revenue 89

So now you need to:
Cr. Revenue 801

Quote:

Originally Posted by Kevin5286

4/ A debit posting to Salaries Expense of 367 was omitted.
--> So I have to add up 367$ to Salaries Expense account, rite?

Yes.

Quote:

Originally Posted by Kevin5286

5/ A payment of a balance due for 309 was credit to cash for 309 and credit to Accounts Payable for 390.
--> It should be Credited to Cash for 309 and Debited to Account Payable for 309, what should I do now?

What was done:
Cr. AP 390
Cr. Cash 309

What should have been done:
Dr. AP 309
Cr. Cash 309

Adjusting JE
Dr. AP 390
Dr. AP 309

Or, you can just say Dr. AP 699

Quote:

Originally Posted by Kevin5286

6/ The withdrawal of 500 cash for Salem Personal use was debit to Salaries Expense for 500 cash and credit to cash for 500.
--> It should be debited to Salem Drawing for 500 and credited to Cash for 500, rite ?

Yes.

Was:
Dr. Salaries Expense 500
Cr. Cash 500

Should have:
Dr. Drawing 500
Cr. Cash 500

Adjusting:
Dr. Drawing 500
Cr. Salaries Expense 500

So, the new adjusted trial balance looks like this:

Debits:
Cash 4,020
Accounts Receivable 3,051
Supplies 460
Equipment 3,340
R. Salem, Drawings 1,300
Salaries Expense 3,267
Office Expense 910

Total Debits = $16,348

Credits:
Accounts Payable 1,967
Unearned Revenue 2,200
R. Salem, Capital 9,000
Service Revenue 3,181

Total Credits = $16,348

Thank you so much for all your help Captain Forest, that is awesome.
Since I used to get confused with Uncorrect Trial Balances, your post and explanation help me understand about the method and I am sure I can adjust any uncorrect trial balance now.
Thanks again Captain Forest.

I am doing a balance sheet for a class and I do not understand how to place everything. What would go under what? Like Rent, take-home sakary, checking account, savings account food, educational loan, value automoble, telephone pd for month, credit card balance, loan payment,auto insurance,household possessions, stero equipment, electricity, lunches/parking at work, donations, home computer, stock investment, clothing,and restaurant. Can someone help me out with these.