Problem

Effect of errors on the trial balanceThe following trial balance was prepared from the led...

Effect of errors on the trial balance

The following trial balance was prepared from the ledger accounts of Cook Inc.:

COOK INC. Trial Balance May 31,2011
Account Titles	Debit	Credit
Cash	$7,200
Accounts Receivable	1,770
Supplies	420
Prepaid Insurance	2,400
Land	5,000
Accounts Payable		$1,500
Common Stock		1,800
Retained Earnings		7,390
Dividends	400
Service Revenue		19,600
Rent Expense	3,600
Salaries Expense	9,000
Operating Expenses	2,500
Totals	$32,290	$30,290

The accountant for Cook, Inc., made the following errors during May 2011.

1. The cash purchase of land for $3,000 was recorded as a $5,000 debit to Land and a $3,000 credit to Cash.

2. An $800 purchase of supplies on account was properly recorded as a debit to the Supplies account but was incorrectly recorded as a credit to the Cash account.

3. The company provided services valued at $8,600 to a customer on account. The accountant recorded the transaction in the proper accounts but in the incorrect amount of $6,800.

4. A $600 cash receipt from a customer on an account receivable was not recorded.

5. A $400 cash payment of an account payable was not recorded.

6. The May utility bill, which amounted to $550 on account, was not recorded.

Required

a. Identify the errors that would cause a difference in the total amounts of debits and credits that would appear in a trial balance. Indicate whether the Debit or Credit column would be larger as a result of the error.

b. Indicate whether each of the preceding errors would overstate, understate, or have no effect on the amount of total assets, liabilities, and equity. Your answer should take the following form: