The following trial balance of Ayayai Corporation does not balance. AYAYAI CORPORATION TRIAL BALANCE JUNE 30, 2020 Debit Credit Cash $7,556 Accounts Receivable 7,120 Supplies 3,787 Equipment 7,300 Accounts Payable $8,748 Common Stock 11,500 Retained Earnings 3,300 Service Revenue 5,195 Office Expense 5,400 $31,163 $28,743 An examination of the ledger shows these errors. 1. Cash received from a customer on account was recorded (both debit and credit) as $1,480 instead of $1,840. 2. The purchase on account of a computer costing $4,000 was recorded as a debit to Office Expense and a credit to Accounts Payable. 3. Services were performed on account for a client, $2,500, for which Accounts Receivable was debited $2,500 and Service Revenue was credited $250. 4. A payment of $70 for telephone charges was entered as a debit to Office Expense and a debit to Cash. 5. The Service Revenue account was totaled at $5,600 instead of $5,630. From this information prepare a corrected trial balance.

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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The following trial balance of Ayayai Corporation does not balance.

AYAYAI CORPORATION TRIAL BALANCE JUNE 30, 2020
	Debit		Credit
Cash		$7,556
Accounts Receivable		7,120
Supplies		3,787
Equipment		7,300
Accounts Payable				$8,748
Common Stock				11,500
Retained Earnings				3,300
Service Revenue				5,195
Office Expense		5,400
		$31,163		$28,743

An examination of the ledger shows these errors.

1.		Cash received from a customer on account was recorded (both debit and credit) as $1,480 instead of $1,840.
2.		The purchase on account of a computer costing $4,000 was recorded as a debit to Office Expense and a credit to Accounts Payable.
3.		Services were performed on account for a client, $2,500, for which Accounts Receivable was debited $2,500 and Service Revenue was credited $250.
4.		A payment of $70 for telephone charges was entered as a debit to Office Expense and a debit to Cash.
5.		The Service Revenue account was totaled at $5,600 instead of $5,630.

From this information prepare a corrected trial balance.

Expert Solution

Step 1 General Introduction

Trial balance is made on periodical basis to assure that entries are recorded in company's books of accounts are mathematically correct. The totals of debit should be same as credits balances and is a sum of accounts like assets, liabilities, expenses and revenues.

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