Problem - Paul Shill, the owner of Gift Stores discovered a number of errors in his records and hired an auditor to investigate the number of errors in the following trial balance:
Gift Stores Trial Balance December 31, 2009
Debit
Cash.................................... $11,000
Accounts receivable................ $15,800
Office supplies..................... .. 5,300
Office equipment..................... 41,000
Accounts payable.................... 18,930
P.Shill, capital....................... 51,490
P. Shill, withdrawals............... 18,000
Services revenue.................... 45,600
Wages expense..................... 12,000
Rent expense........................ 9,600
Advertising expense................ _______ 2,500
Totals................................. $126,790 $104,680
The auditor found the following errors:
i. The sum of the debits in the cash account is $74,350 and the sum of the credits is $61,080.
ii. A $550 payment from a credit customer was posted to cash but was not posted to accounts receivable.
iii. A credit purchase of office supplies for $800 was completely unrecorded.
iv. A transposition error occurred in copying the balance of the services revenue account from the trial balance. The correct amount was $46,500.
Note: Other errors were made in placing the account balances in the trial balance columns.
Required:
(a) Correct the above errors.
(b) Using the above information, prepare a corrected trial balance.