The Colby Group has the following unadjusted trial balance as of August 31, 2019:
The Colby Group Unadjusted Trial Balance August 31, 2019 Debit Balances Credit Balances Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,300 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,000 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,400 Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,900 Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,000 Notes Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,600 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000 Terry Colby, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,150 Terry Colby, Drawing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,000 Fees Earned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454,450 Wages Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000 Rent Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,800 Advertising Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,200
Miscellaneous Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,100
667,700 707,200
The debit and credit totals are not equal as a result of the following errors:
a. The cash entered on the trial balance was understated by $6,000.
b. A cash receipt of $5,600 was posted as a debit to Cash of $6,500.
c. A debit of $11,000 to Accounts Receivable was not posted.
d. A return of $150 of defective supplies was erroneously posted as a $1,500 credit to Supplies.
e. An insurance policy acquired at a cost of $1,200 was posted as a credit to Prepaid Insurance.
f. The balance of Notes Payable was understated by $20,000.
g. A credit of $4,800 in Accounts Payable was overlooked when determining the balance of the account.
h. A debit of $7,000for a withdrawal bythe owner was posted as a creditto Terry Colby, Capital.
i. The balance of $58,100 in Rent Expense was entered as $51,800 in the trial balance.
j. Gas, Electricity, and Water Expense, with a balance of $24,150, was omitted from the trial balance.
Instructions
1. Prepare a corrected unadjusted trial balance as of August 31, 2019.
2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.
Answer:
1.
Cash*22,400
Accounts Receivable48,000
Supplies**8,750
Prepaid Insurance4,300
Equipment196,000
Notes Payable117,600
Accounts Payable30,800
Terry Colby, Capital122,150
Terry Colby, Drawing63,000
Fees Earned454,450
Wages Expense270,000
Rent Expense58,100
Advertising Expense25,200
Gas, Electricity, and Water Expense 24,150
Miscellaneous Expense5,100
* $17,300 + $6,000 (a) – $900 (b)
** $7,400 + $1,500 – $150
2. No. The trial balance indicates only that the debits and credits are equal. Any errors
that have the same effect on debits and credits will not affect the balancing of the
trial balance.