Question

a. Cash is understated by $ 1,300.

b. A $ 4,200 debit to Accounts Receivable was posted as a credit.

c. A $ 800 purchase of office supplies on account was neither journalized nor posted.

d. Equipment was incorrectly transferred from the ledger as $ 86,900. It should have been transferred as $ 79,000.

e. Salaries Expense is overstated by $ 350.

f. A $ 600 cash payment for advertising expense was neither journalized nor posted.

g. A $ 150 cash dividend was incorrectly journalized as $ 1,500.

h. Service Revenue was understated by $ 4,600.

i. A 12 -month insurance policy was posted as a $ 1,400 credit to Prepaid Insurance. Cash was posted correctly.

Answer 1

		Balance
Account Title	Note No.	Debit ($)	Credit ($)
Cash	1	11,000
Accounts Receivables	2	14,800
Office Supplies	3	2,300
Prepaid Insurance	4	4,500
Equipment	5	79,000
Account Payable	6		3,500
Notes Payable			48,000
Common Stock			59,000
Dividend	7	2,900
Service Revenue	8		9,600
Salaries Expenses	9	4,100
Rent Expenses		900
Advertising Expenses	10	600
Total		120,100	120,100

Note No.1: Cash
Balance given	$ 8950
Add: Understatement of cash	1300
Less: Advertising expenses not journalized	-   600
Add: incorrect journalizing of cash dividend	1500
Less: actual cash dividend paid	-   150
Cash balance	$ 11000

Note No.2: Accounts Receivables
Balance given	$ 6400
Add: amount wrongly credited	4200
Add: amount should have been debited	4200
Accounts Receivables	$ 14800

Note No.3: Office Supplies
Balance given	$ 1500
Add: Purchases not journalized	800
Office supplies	$ 2300

Note No.4: Prepaid Insurance
Balance given	$ 1700
Add: amount wrongly credited	1400
Add: amount should have been debited	1400
Prepaid Insurance	$ 4500

Note No.5: Equipment
Balance given	$ 86900
Correct balance	$ 79000

Note No.6: Account payable
Balance given	$ 2700
Add: Purchases not journalized	800
Account payable	$ 3500

Note No.7: Dividends
Balance given	$ 4250
Less: incorrect journalizing of cash dividend	- 1500
Add: actual cash dividend paid	150
Dividends	$ 2900

Note No.8: Service Revenue
Balance given	$ 5000
Add: understatement of service revenue	4600
Service Revenue	$ 9600

Note No.9: Salaries Expenses
Balance given	$ 4450
Less: overstatement of salaries expenses	- 350
Salaries Expenses	$ 4100

Note No.10: Advertising Expenses
Balance given	-
Add: Advertising expenses not journalized	600
Advertising Expenses	600