Question

WANDA LANDOESKA COMPANY
TRIAL BALANCE
APRIL 30, 2007

Cash (Dr) 4,800
Accounts Receivable (Dr) 2,570
Prepaid Insurance (Dr)700
Equipment (Cr) 8,000
Accounts Payable (Cr) 4,500
Property Tax Payable (Dr)560
Wanda , Capital (Cr) 11,200
Service Revenue (Dr) 6,960
Salaries Expense (Dr)4,200
Advertising Expense (Dr)1,100
Property Tax Expense (Cr) 800
Total (Dr)20,890 (Cr)24,500


The trial balance of Wenda Landowska Company does not balance. Your review of the ledger reveals the following:
1-Each account had a normal balance.
2-The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100.
3-A transpositions error was made in Accounts Receivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690,respectively.
4-A debit posting to Advertising Expense of $300 was omitted.
5-A $1,500 cash drawing by the owner was debited to Wanda Landowska, Capital, and credited to Cash.
-Prepare a correct trial balance.

Answer 1

Preparation of correct Trail balancebalance:

Incorrect trailbalance		Corrected trail balance
Particulars	Debit($)	Credit($)	Debit($)	Credit($)
Cash	4,800	3,300
Accounts receivable	2,570	2,750
Prepaid insurance	700	800
Equipment	8,000	8,000
Accounts payable	4,500		4,400
Property tax payable	560		560
Wanda, Capital	11,200		11,200
Wanda, Drawings	1,500
Service revenue	6,960		6,690
Salary expense	4,200	4,200
Advertising expense	1,100	1400
Property tax expense	800	900
Total	20,890	24,500	22,850	22850

(Note: Debit fottings in prepaid insurance is understated which means the it is increased by 100)