Chapter 2, Problem P2.39BPGB

Correcting errors in a trial balance

Learning Objective 4 Total Debits $123,300

LOVE TO LEARN CHILD CARE Trial Balance May 31, 2018
	Balance
Account Title	Debit	Credit
Cash	$8,060
Accounts Receivable	8,700
Office Supplies	1,000
Prepaid Insurance	1,700
Equipment	90,400
Accounts Payable		$3,000
Notes Payable		45,000
Ebony, Capital		54,000
Ebony, Withdrawals	3,740
Service Revenue	4,350
Salaries Expense		16,300
Rent Expense	400
Total	$118,350	$118,300

The trial balance of Love to Learn Child Care does not balance.

The following errors are detected.

1. Cash is understated by $1,800.
2. A $3,800 debit to Accounts Receivable was posted as a credit.
3. A $1,000 purchase of office supplies on account was neither journalized nor posted.
4. Equipment was incorrectly transferred from the ledger as $90,400. It should have been transferred as $82,500.
5. Salaries Expense is overstated by $350.
6. A $300 cash payment for advertising expense was neither journalized nor posted.
7. A $160 owner’s withdrawal of cash was incorrectly journalized as $1,600.
8. Service Revenue was understated by $4,000.
9. A 12-month insurance policy was posted as a $1, 400 credit to Prepaid Insurance. Cash was posted correctly.

Prepare the corrected trial balance as of May 31, 2018. Journal entries are not required.