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Resolving Errors and Correcting a Trial Balance Assume we examine the accounts of Century Inc. and identify the following errors. 1. Equipment purchased for $37,500 at year-end was debited to Expenses. 2. Sales on credit of $4,145 were debited to Accounts Receivable for $4,460 and credited to Revenues for $4,145. 3. A $30,000 cash collection on accounts receivable was debited to Cash and credited to Revenues. 4. The inventory amount is understated by $10,000 because the entry to record the purchase of $10,000 of inventory was incorrectly recorded in cost of goods sold (cost of goods sold is included in Expenses). The unadjusted trial balance of Century Inc. is provided below. Prepare a correct unadjusted trial balance, correcting for all errors, including improper recording of debits and credits. Note: Do not use negative sign in your answers. Accounts Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings Revenues Expenses Net earnings Unadjusted Trial Balance Debit $177,815 155,000 (10,000) 907,500 90,000 Credit S 90,000 60,000 125,000 900,000 70,000 375,000 Corrected Unadjusted Trial Balance Debit Credit 300,000 $1.620 315 $1.620.000 s S

Resolving Errors and Correcting a Trial Balance Assume we examine the accounts of Century Inc. and identify the following errors. 1. Equipment purchased for $37,500 at year-end was debited to Expenses. 2. Sales on credit of $4,145 were debited to Accounts Receivable for $4,460 and credited to Revenues for $4,145. 3. A $30,000 cash collection on accounts receivable was debited to Cash and credited to Revenues. 4. The inventory amount is understated by $10,000 because the entry to record the purchase of $10,000 of inventory was incorrectly recorded in cost of goods sold (cost of goods sold is included in Expenses). The unadjusted trial balance of Century Inc. is provided below. Prepare a correct unadjusted trial balance, correcting for all errors, including improper recording of debits and credits. Note: Do not use negative sign in your answers. Accounts Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings Revenues Expenses Net earnings Unadjusted Trial Balance Debit $177,815 155,000 (10,000) 907,500 90,000 Credit S 90,000 60,000 125,000 900,000 70,000 375,000 Corrected Unadjusted Trial Balance Debit Credit 300,000 $1.620 315 $1.620.000 s S

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Resolving Errors and Correcting a Trial Balance Assume we examine the accounts of Century Inc. and identify the following errors. 1. Equipment purchased for $37,500 at year-end was debited to Expenses. 2. Sales on credit of $4,145 were debited to Accounts Receivable for $4,460 and credited to Revenues for $4,145. 3. A $30,000 cash collection on accounts receivable was debited to Cash and credited to Revenues. 4. The inventory amount is understated by $10,000 because the entry to record the purchase of $10,000 of inventory was incorrectly recorded in cost of goods sold (cost of goods sold is included in Expenses). The unadjusted trial balance of Century Inc. is provided below. Prepare a correct unadjusted trial balance, correcting for all errors, including improper recording of debits and credits. Note: Do not use negative sign in your answers. Accounts Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings Revenues Expenses Net earnings Unadjusted Trial Balance Debit $ 177,815 155,000 (10,000) 907,500 90,000 Credit $ 90,000 60,000 125,000 900,000 70,000 375,000 Corrected Unadjusted Trial Balance Debit Credit $ 300,000 $1,620,315 $1,620,000 $ S S
Transcribed Image Text:Resolving Errors and Correcting a Trial Balance Assume we examine the accounts of Century Inc. and identify the following errors. 1. Equipment purchased for $37,500 at year-end was debited to Expenses. 2. Sales on credit of $4,145 were debited to Accounts Receivable for $4,460 and credited to Revenues for $4,145. 3. A $30,000 cash collection on accounts receivable was debited to Cash and credited to Revenues. 4. The inventory amount is understated by $10,000 because the entry to record the purchase of $10,000 of inventory was incorrectly recorded in cost of goods sold (cost of goods sold is included in Expenses). The unadjusted trial balance of Century Inc. is provided below. Prepare a correct unadjusted trial balance, correcting for all errors, including improper recording of debits and credits. Note: Do not use negative sign in your answers. Accounts Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation Accounts payable Notes payable Common stock Retained earnings Revenues Expenses Net earnings Unadjusted Trial Balance Debit $ 177,815 155,000 (10,000) 907,500 90,000 Credit $ 90,000 60,000 125,000 900,000 70,000 375,000 Corrected Unadjusted Trial Balance Debit Credit $ 300,000 $1,620,315 $1,620,000 $ S S
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