Question

Exercise 3-03 The following trial balance of Cullumber Traveler Corporation does not balance. Credit Cullumber Traveler Corporation Trial Balance April 30, 2020 Debit Cash $5,992 Accounts Receivable 5,280 Supplies 3,007 Equipment 6,140 Accounts Payable Common Stock Retained Earnings Service Revenue Office Expense 4,360 $24,779 $7,084 8,040 2,040 5,240 $22,404 An examination of the ledger shows these errors. 1. Cash received from a customer on account was recorded (both debit and credit) as $1,620 instead of $1,890. 2. The purchase on account of a computer costing $3,360 was recorded as a debit to Office Expense and a credit to Accounts Payable. 3. Services were performed on account for a client, $2,290, for which Accounts Receivable was debited $2,290 and Service Revenue was credited $265. 4. A payment of $135 for telephone charges was entered as a debit to Office Expense and a debit to Cash. 5. The Service Revenue account was totaled at $5,240 instead of $5,320. From this information prepare a corrected trial balance.
PLEASE EXPLAIN WHY TO HELP MY STUDY. THANK YOU.

Answer 1

Answer:

Cullumber Traveler Corporation
Trial Balance
April 30,2020
	Debit	Credit
Cash	$5,992
Accounts Receivable	$5,010
Supplies	$3,007
Equipment	$9,500
Accounts payable		$7,084
Common stock		$8,040
Retained earnings		$2,040
Service revenue		$7,345
Office Expense	$1,000
Total	$24,509	$24,509

Explanations:

1. The difference of $270 (1,890-1,620) should be added to 'cash' and deduct from 'Accounts receivable' because this amount was omitted.

2. Increase Equipment by $3,360 and Decrease office expense by $3,360 because incorrect posting.

3. Increase Service revenue by 2,025 (2,290-265) because this amount was omitted.

4. Decrease cash by $135 because incorrect 'Debit' and again decrease cash by $135 for correct entry.

5. The difference of $80 ($5,320 - $5,240) should be added to Service revenue because this amount was omitted.

Calculations:

Cash	5992+270-135-135
Accounts Receivable	5280-270
Supplies	$3,007
Equipment	6140+3360
Accounts payable		$7,084
Common stock		$8,040
Retained earnings		$2,040
Service revenue		5240+2025+80
Office Expense	4360-3360