Reference no: EM131789671

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.