Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 2.5BPR
Corrected
Tech Support Services has the following unadjusted trial balance as of January 31, 2018:
| Tech Support Services Unadjusted Trial Balance January 31, 2018 | ||
| Debit Balances | Credit Balances | |
| Cash | 25,550 | |
| Accounts Receivable | 44,050 | |
| Supplies | 6,660 | |
| Prepaid Insurance | 3,600 | |
| Equipment | 162,000 | |
| Notes Payable | 75,000 | |
| Accounts Payable | 13,200 | |
| Common Stock | 18,000 | |
| Retained Earnings | 83,850 | |
| Dividends | 33,000 | |
| Fees Earned | 534,000 | |
| Wages Expense | 306,000 | |
| Rent Expense | 62,550 | |
| Advertising Expense | 23,850 | |
| Gas, Electricity, and Water Expense | 17,000 | |
| 684,260 | 724,050 | |
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 $8,000.
- B. A cash receipt of $4,100 was posted as a debit to Cash of $ 1,400.
- C. A debit of $ 12,350 to Accounts Receivable was not posted.
- D. A return of $235 of defective supplies was erroneously posted as a $325 credit to Supplies.
- E. An insurance poky acquired at a cost of $3,000 was posted as a credit to Prepaid Insurance.
- F. The balance of Notes Payable was overstated by $21,000.
- G. A credit of $3,450 in Accounts Payable was overlooked when the balance of the account was determined.
- H. A debit of $6,000 for dividends was posted as a debit to Retained Earnings.
- I. The balance of $28,350 in Advertising Expense was entered as $23,850 in the trial balance.
- J. Miscellaneous Expense, with a balance of $4,600, was omitted from the trial balance.
Instructions
- 1. Prepare a corrected unadjusted trial balance as of January 31, 2018.
- 2. Does the fact that the unadjusted (trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.
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Students have asked these similar questions
The unadjusted trial balance of Fortune Company included the following accounts:
Debit $
Sales (80% on credit) for the year ended 31 Dec 2023
Credit $
900,500
Accounts Receivable 31 Dec 2023
209,070
Allowance for Impairment 1 Jan 2023
3,500
The aging of accounts receivable produced the following five groupings.
Days Past Due
Amount
Estimated
Uncollectible
% of
Not yet due
85,000
1%
1-30 days past due
56,000
3%
31-60 days past due
33,500
5%
61-90 days past due
18,570
10%
Over 90 days past due
16,000
15%
Required:
Prepare the adjusting entries to record the impairment loss of receivable for the year 2023. If Fortune
Company:
(a)
(b)
uses the Statement of Financial Position Approach to estimate the uncollectible accounts.
Show your workings.
uses the Income Statement Approach to estimate the uncollectible accounts, and it is
expected that 1% of the net credit sales for the year will be uncollectible.
Required information
[The following information applies to the questions displayed below.]
At December 31, Hawke Company reports the following results for its calendar year.
$2,181,050
$3,134,000
Cash sales
Credit sales
In addition, its unadjusted trial balance includes the following items.
$949,602 debit
$10,550 debit
Accounts receivable
Allowance for doubtful accounts
3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts
in part 1c. (Do not round intermediate calculations.)
Current assets.
Required information
[The following information applies to the questions displayed below.]
At December 31, Hawke Company reports the following results for its calendar year.
$2,181,050
$3,134,000
Cash sales
Credit sales
In addition, its unadjusted trial balance includes the following items.
$949,602 debit
$ 10,550 debit
Accounts receivable
Allowance for doubtful accounts
2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet given the facts
in part 1a.
Current assets:
%24
Chapter 2 Solutions
Corporate Financial Accounting
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