Question

I did the whole work but I still can not understand why my assets are not matching with my liabilites.

could you please help me fix my balance sheet?

31-Dec $40. One month's insurance has been used by the company 31-Dec The remaining inventory of unused office supplies is $90. 31-Dec The estimated depreciation on equipment is $60. Wages incurred from December 29 to December 31 but not yet paid or 31-Dec recorded total $450.

Answer 1

Error is in posting of Wages expenses of $4,200 to T Accounts, and so to the Trial balance & Financial statements.

Amount of $4,200 dated 28th Dec should be posted to Wages expense account and not Wages Payable !

Highlighted in orange below:

Credit Date Credit Date Credit Date Credit Debit Date Accounts Receivable 2,500 21-Dec Debit Date Supplies 300 31-Dec Debit Date Prepaid Insurance 480 31-Dec 16-Dec 1,500 5-Dec 210 1-Dec 40 T Accounts Date Debit Date Cash 1-Dec 6,000 1-Dec 15-Dec 5,400 1-Dec 21-Dec 1,500 1-Dec 23-Dec 28-Dec 30-Dec 500 480 3,600 170 4,200 200 Bal. Bal. Bal. 90 Bal. 3,750 Equipment 3,600 1,000 Accumulated Depreciation 31-Dec Accounts Payable 170 5-Dec 440 Wages Payable 31-Dec 1-Dec 60 23-Dec 300 450 Bal. 130 Bal. 450 3,600 Common Stock 1-Dec Bal. Retained Earnings Bal. Dividends 200 6,000 30-Dec 6,000 Bal. Bal. Service revenue 15-Dec 16-Dec Bal. Rent expense 500 200 Wages expense 4,200 450 Insurance expense 40 5,400 1-Dec 31-Dec 1-Dec 31-Dec 2,500 7,900 Bal. 500 Bal. 4,650 Supplies expense 210 Depreciation expense 60 31-Dec 31-Dec Bal. 210 Bal.

Unadjusted TB Debit Credit 3,750 1,000 300 480 3,600 Company Account Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Wages Payable Common Stock Retained Earnings Dividends Service revenue Rent expense Wages expense Insurance expense Supplies expense Depreciation expense Totals Adjusted TB Debit Credit 3,750 1,000 90 440 3,600 60 130 450 6,000 130 6,000 200 200 7,900 7,900 500 4,200 500 4,650 40 210 60 14,030 14,030 14,540 14,540

7,900 Company Income Statement For period ended December 31 Revenue Service revenue Expenses Rent expense Wages expense Insurance expense Supplies expense Depreciation expense Total Expenses Net Income 500 4,650 40 210 60 5,460 2,440 Statement of Retained Earnings For period ended December 31 Beginning balance Net Income Less Dividends Ending Balance 2,440 (200) 2,240

Balance Sheet As of December 31 Assets Current Assets: Cash Accounts Receivable Supplies Prepaid Insurance Total Current Assets Liabilities Liabilities: 3,750 Accounts Payable 1,000 Wages Payable 90 440 5,280 Total Liabiltiies $ $ $ $ $ $ $ 130 450 $ 580 Fixed Assets: Equipment Accumulated Depreciation Equipment, net $ $ $ Stockholders Equity: 3,600 Common Stock (60) Retained Earnings 3,540 Total Stockholders Equity $ $ $ 6,000 2,240 8,240 Total Assets $ 8,820 Total Liabilities & Stockholders Equity $ 8,820