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Chapter1: Financial Statements And Business Decisions
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Problem 1Q
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![Preparing a Corrected Trial Balance
The following trial balance of Splendid Household Services as of December 31, 2019 does not
balance because of a number of errors:
Debit
P 13,000
30,840
8,700
Credit
Cash
Accounts receivable
Supplies
Prepaid insurance
Equipment
Notes Payable
Accounts Payable
S, Capital
S, Drawing
Service Income
2,140
69,400
P 14,000
5,650
31,200
2,000
147,500
Wages expense
Rent expense
Advertising expense
Utility expense
Total
46,500
6,000
510
1,920
P. 181,010 P. 198,350
In the process comparing the amounts in the trial balance with the ledger, re-computing the
balances of the accounts, and comparing the postings with the journal entries, the errars
described below were discovered:
a. The balance of cash was understated by P5,000.
b. The cash receipts of P1,200 was posted as debit to cash of P2,100.
c. A credit of P600 to accounts receivable was not posted.
d. Areturn of P750 of defective supplies purchased was erroneously posted as P570 credit to
supplies.
e. An insurance policy acquired at cost of P1,480 was posted as a credit to prepaid insurance.
f. A debit of P2,250 in accounts payable was overlooked when determining the balance of the
account.
g. The balance of notes payable was overstated by P1,000.
h. A debit of P5,100 in advertising expense was entered as P510 in the trial balance.
i. Miscellaneous expense with a balance of P3,220 was omitted from the trial balance.
Instruction:
Prepare a corrected trial balance as of December 31, 2019.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87665baa-cb02-430f-b591-03ab9b1ffab2%2F7b618eb6-4b27-4312-8335-c680d7467935%2F394v66_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Preparing a Corrected Trial Balance
The following trial balance of Splendid Household Services as of December 31, 2019 does not
balance because of a number of errors:
Debit
P 13,000
30,840
8,700
Credit
Cash
Accounts receivable
Supplies
Prepaid insurance
Equipment
Notes Payable
Accounts Payable
S, Capital
S, Drawing
Service Income
2,140
69,400
P 14,000
5,650
31,200
2,000
147,500
Wages expense
Rent expense
Advertising expense
Utility expense
Total
46,500
6,000
510
1,920
P. 181,010 P. 198,350
In the process comparing the amounts in the trial balance with the ledger, re-computing the
balances of the accounts, and comparing the postings with the journal entries, the errars
described below were discovered:
a. The balance of cash was understated by P5,000.
b. The cash receipts of P1,200 was posted as debit to cash of P2,100.
c. A credit of P600 to accounts receivable was not posted.
d. Areturn of P750 of defective supplies purchased was erroneously posted as P570 credit to
supplies.
e. An insurance policy acquired at cost of P1,480 was posted as a credit to prepaid insurance.
f. A debit of P2,250 in accounts payable was overlooked when determining the balance of the
account.
g. The balance of notes payable was overstated by P1,000.
h. A debit of P5,100 in advertising expense was entered as P510 in the trial balance.
i. Miscellaneous expense with a balance of P3,220 was omitted from the trial balance.
Instruction:
Prepare a corrected trial balance as of December 31, 2019.
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