FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question

The trial balance of Sam’s Deli Inc. at October 31, 2020, does not balance:

The accounting records contain the following errors:

-Recorded a $1,000 cash revenue transaction by debiting Accounts Receivable. The credit entry was correct.

-Posted a $1,000 credit to Accounts Payable as $100.

-Did not record utilities expense or the related account payable in the amount of $200.

-Understated Share Capital by $1,100.

-Omitted insurance expense of $1,000 from the trial balance.

Q1: Prepare the correct trial balance at October 31, 2020, complete with a heading. Journal entries are not required but will be helpful in correcting the trial balance.

Q2: Organize the elements of the trial balance in a way that would assist a bank manager who has to decide whether to loan money to Sam’s Deli.

A
D
1 Cash
$ 4,200
2 Accounts receivable
13,000
Inventory
4 Supplies
Land
3
17,000
600
5
55,000
Accounts payable
7 Share capital
8 Sales revenue
9 Salary expense
Rent expense
Utilities expense
Total
6
$ 12,000
47,900
32,100
1,700
10
800
11
700
12
$ 93,000
$ 92,000
13
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Transcribed Image Text:A D 1 Cash $ 4,200 2 Accounts receivable 13,000 Inventory 4 Supplies Land 3 17,000 600 5 55,000 Accounts payable 7 Share capital 8 Sales revenue 9 Salary expense Rent expense Utilities expense Total 6 $ 12,000 47,900 32,100 1,700 10 800 11 700 12 $ 93,000 $ 92,000 13
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