Question

A part-time bookkeeper for Skywalker Tours has created the trial balance at the end of the year, and cannot get it to balance. All the entries have been journalized and posted to the general ledger properly, and all the accounts should have normal balances.

November 30, 2018
Skywalker Tours
Trial Balance
Account Titles	DR	CR
Accounts Payable	$3,160
Accounts Receivable	$2,290
Advertising Expense	$2,090
Notes Payable	$5,690
Luke, Capital		$6,080
Cash		$6,710
Interest Expense	$460
Maintenance Expense		$270
Office Supplies	$1,880
Luke, Withdrawals	$2,110
Prepaid Insurance		$1,440
Equipment	$15,000
Rent Expense	$6,370
Salaries Expense	$5,650
Service Revenue		$27,800
Telephone Expense	$470
Unearned Revenue	$2,010
Total	$47,180	$42,300

Required

Recreate the trial balance for Skywalker Tours so that the accounts are listed in the order they would typically appear in a chart of accounts, and ensure that debits equal credits.

Choose the correct order of titles for the trial balance statement.
Do not enter dollar signs or commas in the input boxes.

AnswerNovember 30, 2018Skywalker ToursTrial Balance
AnswerNovember 30, 2018Skywalker ToursTrial Balance
AnswerNovember 30, 2018Skywalker ToursTrial Balance
Account Titles	DR	CR
Cash	Answer	Answer
Accounts Receivable	Answer	Answer
Prepaid Insurance	Answer	Answer
Office Supplies	Answer	Answer
Equipment	Answer	Answer
Accounts Payable	Answer	Answer
Unearned Revenue	Answer	Answer
Notes Payable	Answer	Answer
Luke, Capital	Answer	Answer
Luke, Withdrawals	Answer	Answer
Service Revenue	Answer	Answer
Advertising Expense	Answer	Answer
Interest Expense	Answer	Answer
Maintenance Expense	Answer	Answer
Rent Expense	Answer	Answer
Salaries Expense	Answer	Answer
Telephone Expense	Answer	Answer
Total	Answer	Answer

Answer 1

Some of the balances have been posted wrongly. They have been corrected in the Trial Balance prepared below with reasoning.

November 30, 2018

Skywalker Tours

Trial Balance

Account Titles	Dr	Cr	Correct	Reason
Accounts Payable		3160	No	Payables are Liability
Accounts Receivable	2290		Yes
Advertising Expense	2090		Yes
Notes Payable		5690	No	Payables are Liability
Luke Capital		6080	Yes
Cash	6710		No	Cash is an Asset
Interest Expense	460		Yes
Maintenance Expense	270		No	Expenses are Debited (Rule 3)
Office Supplies	1880		Yes
Luke, Withdrawals	2110		Yes
Prepaid Insurance	1440		No	Prepaid Insurance is Current Asset
Equipment	15000		Yes
Rent Expense	6370		Yes
Salaries Expense	5650		Yes
Service Revenue		27800	Yes
Telephone Expense	470		Yes
Unearned Revenue		2010	No	Income/Revenue is credited (Rule 3)
Total	44740	44740

The three Rules should be remembered in accounting:

1. Debit the Receiver and Credit the Giver (For Personal Accounts)

2. Debit what comes in and Credit what goes out (For Real Account like plant machinery, capital assets)

3. Debit all expense/losses, Credit all Income/Gains (For Nominal Accounts)