Ask Me Help Desk - Normal trial balance

Normal trial balance

I have this information and I cound not balance Dr. and Cr. Please I need your help.
Cash $ 6,123
Accounts Receivable $2,750
Prepaid Insurance 693
Equipment 8,224
Accounts Payable 4,107
Property Taxes Payable 593
M.Sterling, Capital 13,454
Service Revenue 6,690
Salaries Expense 4,533
Advertising Expense 1,461
Property Tax Expense 772
$27,628 $21,772

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

The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $165.

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

A debit posting to Salaries Expense of $243 was omitted.

A $1,290 cash drawing by the owner was debited to M. Sterling, Capital for $1,290 and credited to Cash for $1,290.

A $470 purchase of supplies on account was debited to Equipment for $470 and credited to Cash for $470.

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

A collection from a customer for $190 was debited to Cash for $190 and credited to Accounts Payable for $190.

Thanks for your help. I do not know why is not balancing my trial.

Normal trial balance

Cash $ 6,123
Accounts Receivable $2,750
Prepaid Insurance 693
Equipment 8,224
Accounts Payable 4,107
Property Taxes Payable 593
M.Sterling, Capital 13,454
Service Revenue 6,690
Salaries Expense 4,533
Advertising Expense 1,461
Property Tax Expense 772
$27,628 $21,772

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

The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $165. I added 165 to PI, AP as Dr. and to as Cr.PTE.

Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $6,960, respectively. (I corrected the balance for AR as Dr. and SR as Cr.)
A debit posting to Salaries Expense of $243 was omitted. (I added 243 to Salary Expenses As Dr.)

A $1,290 cash drawing by the owner was debited to M. Sterling, Capital for $1,290 and credited to Cash for $1,290. ( I Debited 1,290 as M. Sterlin,Drawing.)

A $470 purchase of supplies on account was debited to Equipment for $470 and credited to Cash for $470. (I debited as Supplies and subtracted from cash debit and credited as AP.)

A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45. (I debited 405 as cash and as Advertising Expenses.)

A collection from a customer for $190 was debited to Cash for $190 and credited to Accounts Payable for $190. (I debited to Account receivable and credited to cash.)

I came up with the result shown below. I could not balance the debits and credits. Where is my mistake. Please help me.

Debit Credit
Cash 6058 190
Accounts receivable 2760
Prepaid insurance 858
Supplies 470
Equipment 8694
Accounts payable 5600
Property taxes payable 1530
M.Sterling, Capital 13454
M.Sterling, Drawing 1290
Service Revenue 6960
Salaries Expense 4776
Advertising Expense 1866
Property taxes expense 937
Total 27709 27,734

Normal trial balance

Sorry I forgot one thing in the error # 5 I credited 470 as Equipment too.

Please don't ever put additional information into another thread like that. Those two would get separated and no one would have any idea what your second post is referring to, not to mention that they may not see if before answering the first post. I've connected them back into the same thread.

And please don't double post either. If you wanted to add your work, you should have added it to the same thread, for the same reason. This just causes mass confusion among those who are attempting to help you, with pieces everywhere.

To answer this question, let's start by putting all the initial data in the right column:
Cash: Debit
AR: Debit
Prepaid Insurance: Debit
Equip: Debit
AP: Credit
Property Tax payable: Credit
M. Sterling Capital: Credit
Service Rev: Credit
Salaries Exp: Debit
Ad Exp: Debit
Prop Tax Exp: Debit
Before we start, Debit = 24,556 and credit = 24844

1. Add 165 to Prepaid Ins in the Debit column, subtract 165 in Acct Payable in Credit column, add 165 to Prop Tax expense in debit column
2. Change Acct Rec to 2,570 and service rev to 6,960
3. Add 243 to salaries exp debit column (at this point, debits = credits)
4. Add 1,290 to M Sterling Capital in the credit col, since that was in error, the cash is correct, but add a 1,290 debit to M. Sterling Drawing (that was forgotten in the problem it seems)
5. The error here is that they debited equip and not "supplies". They also credited Cash and not Acct Payable. First debit cash back (add 470 to cash), debit 470 in supplies, credit 470 in equipment (subtract 470 from debit column), and then credit AP (add 470 to credit column of ap)
6. 405 was in error here. You have to debit Ad exp 405 (add to debit column) and credit cash, (subtract 405 in debit column)
7. The error here is 450 should not have been credited to AP. Acct rec gets credited. Subtract 450 from acct rec debit column. Debit the 450 back to AP (subtract 450 to credit column on AP)

If all goes well, u should have the following
Cash: 6208 D
AR: 2120 D
Prepaid Ins: 858 D
Supplies: 490 D
Equip: 7734 D
AP: 3982 C
Prop Tax Payable: 593 C
M. Sterling Capital: 14744 C
M Sterling Drawing: 1290 D
Service Rev: 6960 C
Salaries Exp: 4776 D
Ad Exp: 1866 D
Prop Tax Exp: 937
Credits = Debits = 26,279

Quote:

The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $165. I added 165 to PI, AP as Dr. and to as Cr.PTE.

A debit to payables is a subtraction. You don't technically "add as debit" - you just "debit" the account. So I'm not quite sure what you mean by that because debit isn't an add to that account. I do know your payables is off and I have no idea where you came up with that balance.

Quote:

A $1,290 cash drawing by the owner was debited to M. Sterling, Capital for $1,290 and credited to Cash for $1,290. ( I Debited 1,290 as M. Sterlin,Drawing.)

You never corrected the error though. You've done this several times - putting in the correct amount but not undoing the error. It was debited to the capital account and shouldn't be there. You haven't corrected that.

Quote:

A $470 purchase of supplies on account was debited to Equipment for $470 and credited to Cash for $470. (I debited as Supplies and subtracted from cash debit and credited as AP.)

"Subtracted from cash as debit." Debits don't subtract from cash. So I'm not sure what you actually did there. Again, you simple "debit" the account. The adding/subtracting takes care of itself when you balance. So again, I don't know if you meant to subtract, or if you think a debit is a subtract. But debits add to cash. You also, again, did not un-do the error to the equipment. And you never dealt with the payable at all.

Quote:

A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45. (I debited 405 as cash and as Advertising Expenses.)

What does a credit do to cash? What does making a cash payment do to cash? What will a debit do to cash? What should have happened to cash? What did happen was a credit of $45.

Quote:

A collection from a customer for $190 was debited to Cash for $190 and credited to Accounts Payable for $190. (I debited to Account receivable and credited to cash.)

The cash part was correct and you removed it. You again didn't un-do the error to the payables. And what happens to receivables when you collect on account? What does a debit do to that account?

These can be tricky. You have to know what the correct entry is to begin with. You have to make sure that happened to those accounts. If it did not, do it. If something got done that should not have happened, un-do it using the opposite side of the account. Think through these very carefully. I'm also not quite sure if you know some of your normal balances.

Quote:

Debit Credit
Cash 6058 190

Never do this. No account ever has a balance of both a debit and a credit. The credit to cash is incorrect. However, if it had been correct, you should have balanced the account after you did it, not just leave it on the credit side.

Cleveland please read the guidelines for posting homework:
https://www.askmehelpdesk.com/financ...-b-u-font.html

This goes for answering as well as asking. We are not here just to do someone's homework for them - don't just give answers out. Not to mention that your final balances aren't correct anyway.

Quote:

Originally Posted by astu

Sorry I forgot one thing in the error # 5 I credited 470 as Equipment too.

Then how did your equipment balance get bigger? I'm still thinking you've got some dr/cr rules missing?

To be specific:

Quote:

1. Add 165 to Prepaid Ins in the Debit column, subtract 165 in Acct Payable in Credit column, add 165 to Prop Tax expense in debit column

Credits don't subtract from payables.

Quote:

7. The error here is 450 should not have been credited to AP. Acct rec gets credited. Subtract 450 from acct rec debit column. Debit the 450 back to AP (subtract 450 to credit column on AP)

? And don't say "subtract from debit column." You don't subtract from a column. You credit it. Then you BALANCE it.

Quote:

If all goes well, u should have the following
Cash: 6208 D
AR: 2120 D
Supplies: 490 D
Equip: 7734 D
AP: 3982 C

Not sure how you came up with these balances. The only errors you made above are recievables and payables, so how did cash, supplies and equipment all get off?