UNIVERSITY OF THE WEST INDIES Mona School of Business & Management ACCT 1005 - FINANCIAL ACCOUNTING Worksheet 2 - Financial Accounting Cycle Lecture Questions Question 1 The trial balance of Rawna Gourde Financial Service does not balance. Rawna Gourde Financial Services Trial Balance as at December 31, 2006 Cash $ 3,800 Accounts Receivable 2,000 Supplies 500 Office Furniture 2,300 Land 46,000 Accounts Payable $ 2,800 Note Payable 18,300 Rawna Gourde, Capital 29,500 Rawna Gourde, Withdrawals 3,700 Service Revenue 4,900 Salary Expense 1,300 Rent Expense 600 Advertising Expense 400 Utilities Expense 200 Total 60,800 55,500 The following errors were detected: i) The cash balance is understated by $400. ii) Rent Expense of $200 was erroneously posted as a credit rather than a debit. -1- iii) The balance of Advertising Expense is $300, but it is listed as $400 on the trial balance. iv) A $600 debit to Accounts Receivable was posted $ 60. v) The balance of Utilities Expense is understated by $60. vi) A $1,300 debit to the withdrawal account was posted as a debit to Rawna Gourde's, Capital. vii) A $100 purchase of supplies on account was neither journalized nor posted. viii) A $5 600 credit to Service Revenue was not posted. ix) Office Furniture should be listed in the amount of $1,300. Required: a) b) c) State the journal entries necessary to correct the errors made. Prepare the correct trial balance as at December 31, 2006. Determine whether a loss or a profit was made.
UNIVERSITY OF THE WEST INDIES Mona School of Business & Management ACCT 1005 - FINANCIAL ACCOUNTING Worksheet 2 - Financial Accounting Cycle Lecture Questions Question 1 The trial balance of Rawna Gourde Financial Service does not balance. Rawna Gourde Financial Services Trial Balance as at December 31, 2006 Cash $ 3,800 Accounts Receivable 2,000 Supplies 500 Office Furniture 2,300 Land 46,000 Accounts Payable $ 2,800 Note Payable 18,300 Rawna Gourde, Capital 29,500 Rawna Gourde, Withdrawals 3,700 Service Revenue 4,900 Salary Expense 1,300 Rent Expense 600 Advertising Expense 400 Utilities Expense 200 Total 60,800 55,500 The following errors were detected: i) The cash balance is understated by $400. ii) Rent Expense of $200 was erroneously posted as a credit rather than a debit. -1- iii) The balance of Advertising Expense is $300, but it is listed as $400 on the trial balance. iv) A $600 debit to Accounts Receivable was posted $ 60. v) The balance of Utilities Expense is understated by $60. vi) A $1,300 debit to the withdrawal account was posted as a debit to Rawna Gourde's, Capital. vii) A $100 purchase of supplies on account was neither journalized nor posted. viii) A $5 600 credit to Service Revenue was not posted. ix) Office Furniture should be listed in the amount of $1,300. Required: a) b) c) State the journal entries necessary to correct the errors made. Prepare the correct trial balance as at December 31, 2006. Determine whether a loss or a profit was made.
Chapter4: Operating Activities: Sales And Cash Receipts
Section: Chapter Questions
Problem 2.4C
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Transcribed Image Text:UNIVERSITY OF THE WEST INDIES
Mona School of Business & Management
ACCT 1005 - FINANCIAL ACCOUNTING
Worksheet 2 - Financial Accounting Cycle
Lecture Questions
Question 1
The trial balance of Rawna Gourde Financial Service does not balance.
Rawna Gourde Financial Services
Trial Balance as at December 31, 2006
Cash
$ 3,800
Accounts Receivable
2,000
Supplies
500
Office Furniture
2,300
Land
46,000
Accounts Payable
$ 2,800
Note Payable
18,300
Rawna Gourde, Capital
29,500
Rawna Gourde, Withdrawals
3,700
Service Revenue
4,900
Salary Expense
1,300
Rent Expense
600
Advertising Expense
400
Utilities Expense
200
Total
60,800
55,500
The following errors were detected:
i)
The cash balance is understated by $400.
ii)
Rent Expense of $200 was erroneously posted as a credit rather than a debit.
-1-
iii) The balance of Advertising Expense is $300, but it is listed as $400 on the trial balance.
iv)
A $600 debit to Accounts Receivable was posted $ 60.
v)
The balance of Utilities Expense is understated by $60.
vi)
A $1,300 debit to the withdrawal account was posted as a debit to Rawna Gourde's,
Capital.
vii) A $100 purchase of supplies on account was neither journalized nor posted.
viii) A $5 600 credit to Service Revenue was not posted.
ix)
Office Furniture should be listed in the amount of $1,300.
Required:
a)
b)
c)
State the journal entries necessary to correct the errors made.
Prepare the correct trial balance as at December 31, 2006.
Determine whether a loss or a profit was made.
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