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The Lexington Group Unadjusted Trial Balance May 31, 20Y6 Debit Balances Credit Balances Cash 20,350 Accounts Receivable 37,000 Supplies 1,100 Prepaid Insurance 200 Equipment 171,175 Notes Payable 36,000 Accounts Payable 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000

The Lexington Group Unadjusted Trial Balance May 31, 20Y6 Debit Balances Credit Balances Cash 20,350 Accounts Receivable 37,000 Supplies 1,100 Prepaid Insurance 200 Equipment 171,175 Notes Payable 36,000 Accounts Payable 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000

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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### The Lexington Group #### Unadjusted Trial Balance #### May 31, 20Y6 | Account | Debit Balances | Credit Balances | |------------------------|----------------|-----------------| | Cash | 20,350 | | | Accounts Receivable | 37,000 | | | Supplies | 1,100 | | | Prepaid Insurance | 200 | | | Equipment | 171,175 | | | Notes Payable | | 36,000 | | Accounts Payable | | 26,000 | | Common Stock | | 50,000 | | Retained Earnings | | 94,150 | | Dividends | 15,000 | | | Fees Earned | | 429,850 | | Wages Expense | 270,000 | | | Rent Expense | 63,000 | | | Advertising Expense | 25,200 | | | Miscellaneous Expense | 5,100 | | | **Totals** | 608,125 | 636,000 | ### Explanation of the Unadjusted Trial Balance The unadjusted trial balance for The Lexington Group as of May 31, 20Y6, presents the balances of all general ledger accounts before adjusting entries are made. This document organizes account balances into debits and credits. - **Assets** and **Expenses** are typically on the debit side, such as Cash, Accounts Receivable, Supplies, and various expenses. - **Liabilities**, **Equity**, and **Income** accounts typically appear as credits, including Notes Payable, Accounts Payable, and Fees Earned. The totals of the debit and credit columns are presented at the bottom, demonstrating if the general ledger is balanced before adjustments. In this trial balance, debits total 608,125, while credits total 636,000. Adjusting entries would be necessary to ensure both sides ultimately balance.
Transcribed Image Text:### The Lexington Group #### Unadjusted Trial Balance #### May 31, 20Y6 | Account | Debit Balances | Credit Balances | |------------------------|----------------|-----------------| | Cash | 20,350 | | | Accounts Receivable | 37,000 | | | Supplies | 1,100 | | | Prepaid Insurance | 200 | | | Equipment | 171,175 | | | Notes Payable | | 36,000 | | Accounts Payable | | 26,000 | | Common Stock | | 50,000 | | Retained Earnings | | 94,150 | | Dividends | 15,000 | | | Fees Earned | | 429,850 | | Wages Expense | 270,000 | | | Rent Expense | 63,000 | | | Advertising Expense | 25,200 | | | Miscellaneous Expense | 5,100 | | | **Totals** | 608,125 | 636,000 | ### Explanation of the Unadjusted Trial Balance The unadjusted trial balance for The Lexington Group as of May 31, 20Y6, presents the balances of all general ledger accounts before adjusting entries are made. This document organizes account balances into debits and credits. - **Assets** and **Expenses** are typically on the debit side, such as Cash, Accounts Receivable, Supplies, and various expenses. - **Liabilities**, **Equity**, and **Income** accounts typically appear as credits, including Notes Payable, Accounts Payable, and Fees Earned. The totals of the debit and credit columns are presented at the bottom, demonstrating if the general ledger is balanced before adjustments. In this trial balance, debits total 608,125, while credits total 636,000. Adjusting entries would be necessary to ensure both sides ultimately balance.
The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was overstated by $7,000. b. A cash receipt of $8,200 was posted as a debit to Cash of $2,800. c. A debit of $16,500 to Accounts Receivable was not posted. d. A return of $125 of defective supplies was erroneously posted as a $1,250 credit to Supplies. e. An insurance policy acquired at a cost of $3,600 was posted as a credit to Prepaid Insurance. f. The balance of Notes Payable was understated by $9,000. g. A credit of $10,000 in Accounts Payable was overlooked when determining the balance of the account. h. A debit of $5,000 for dividends was posted as a credit to Retained Earnings. i. The balance of $60,300 in Rent Expense was entered as $63,000 in the trial balance. j. Gas, Electricity, and Water Expense, with a balance of $16,350, was omitted from the trial balance.
Transcribed Image Text:The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was overstated by $7,000. b. A cash receipt of $8,200 was posted as a debit to Cash of $2,800. c. A debit of $16,500 to Accounts Receivable was not posted. d. A return of $125 of defective supplies was erroneously posted as a $1,250 credit to Supplies. e. An insurance policy acquired at a cost of $3,600 was posted as a credit to Prepaid Insurance. f. The balance of Notes Payable was understated by $9,000. g. A credit of $10,000 in Accounts Payable was overlooked when determining the balance of the account. h. A debit of $5,000 for dividends was posted as a credit to Retained Earnings. i. The balance of $60,300 in Rent Expense was entered as $63,000 in the trial balance. j. Gas, Electricity, and Water Expense, with a balance of $16,350, was omitted from the trial balance.
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