Question

1.	In the Transactions panel, descriptions of the transactions for the month of March are provided. Each of the transactions in the Transactions panel has been posted to the T accounts. Referring to the T accounts, select the date on which each transaction occurred, enter the amount of the transaction, and select the account to debit and credit.
2.	The trial balance prepared by the intern can be found in the Trial Balance: Unequal Totals panel. The intern is puzzled by the unequal totals. Prepare a corrected trial balance on the Trial Balance: Correct panel.
3.	Compare the trial balance prepared by the intern (Trial Balance: Unequal Totals) to the trial balance that you prepared (Trial Balance: Correct). Use the table provided in the Errors in Trial Balance panel to select the accounts for each type of error.
4.	The intern is puzzled and asks “Are you sure the accounting equation is still in balance?” Using the corrected trial balance you prepared, prove that the accounting equation is in balance. Still puzzled, the intern asks “Why do none of the amounts in the accounting equation equal the totals on the trial balance?” Explain.

	rial Balance: Unequal Totals The intern has prepared the following trial balance for the month of March. KL Company Inc. UNADJUSTED TRIAL BALANCE March 31, 2017 ACCOUNT TITLE DEBIT CREDIT 1 Cash 24,525.00 2 Accounts Receivable 3,925.00 3 Supplies 1,725.00 4 Office Equipment 17,000.00 5 Accounts Payable 1,500.00 6 Notes Payable 17,000.00 7 Common Stock 12,500.00 8 Retained Earnings 1,425.00 9 Dividends 1,925.00 10 Service Revenue 10,100.00 11 Rent Expense 3,200.00 12 Wages Expense 3,375.00 13 Totals    49375.00    48825.00 You are in Column Amount You are in Column Debit selector 29

Answer 1

KL Company In Unadju OprEmber 21 2012 as on Corrected Trial Balance Account Title Debits Credits Debits Credits Frror Cash 24.525 24,525 3,925 Receivable Accounts Receivable is a current asset and have a debit balance 1325 1,725 17,000 1500 office Equipment Accounts Payable Notes Payable 17,000 1,500 Accounts Recelvable is a current liabil ities and have a credit balance 17000 1/000 12,50 Retained Farnines 1425 Retained Earnings is a part of stockholders equits (liabilities) 1425 Dividends is paid (deducted) from retained eamings which has a credit balance, This it has a debit balance. Dividends 1,925 1,925 10,100 Service Revenue 10,100 is acurrent liabilites an have 3.200 Waees Expense (Pavable) 3.375 3.375 Wages expense pavable is a current labilites an have a credit balance 49,375 S 18,825 49.100 $ 49.100

Stockholders's Equity Assets Liabilities Income Statement + Rent Wages Dividend Office Retained Accounts Accounts Notes Expense Expense Common Account Net (Payable) 3,375 Equipment Payable 1,500 (Payable) Stock Earnings Cash Receivable Supplies Payable Description Revenue Income 17,000 1,925 10,100 24,525 3.925 1,725 17,000 3.200 12,500 1.425 = 8,175 Net Income + $ 1925 = $ 8.175 $ 24,525 $ 3,925 $ Total 1,725 $ 1,500 S 17,000 S 3,200 $ 10,100 Total 17,000 3,375 12.500 9,600 S Total 47.175 47,175 The accounting equation prepared as per the correct trial balance is balanced as both the side total is $47,175 In the the trial balance, net income is not calculated, so revenue and income are shown as a separete line item. But in the accounting equation, revenue and expense are adjusted to calulate the net income. Thus the total balance of the trial balance and the accounting equation will not match.