Reference no: EM132769583
Problem - The Colby Group has the following unadjusted trial balance as of August 31, 2019:
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The Colby Group Unadjusted Trial Balance August 31, 2019
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Debit Balances
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Credit Balances
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Cash
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17,300
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Accounts Receivable
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37,000
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Supplies
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7,400
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Prepaid Insurance
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1,900
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Equipment
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196,000
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Notes Payable
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97,600
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Accounts Payable
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26,000
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Terry Colby, Capital
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129,150
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Terry Colby, Drawing
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56,000
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Fees Earned
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454,450
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Wages Expense
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270,000
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Rent Expense
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51,800
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Advertising Expense
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25,200
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Miscellaneous Expense
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5,100
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667,700
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707,200
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The debit and credit totals are not equal as a result of the following errors:
a. The cash entered on the trial balance was understated by $6,000.
b. A cash receipt of $5,600 was posted as a debit to Cash of $6,500.
c. A debit of $11,000 to Accounts Receivable was not posted.
d. A return of $150 of defective supplies was erroneously posted as a $1,500 credit to Supplies.
e. An insurance policy acquired at a cost of $1,200 was posted as a credit to Prepaid Insurance.
f. The balance of Notes Payable was understated by $20,000.
g. A credit of $4,800 in Accounts Payable was overlooked when determining the balance of the account.
h. A debit of $7,000 for a withdrawal by the owner was posted as a credit to Terry Colby, Capital.
i. The balance of $58,100 in Rent Expense was entered as $51,800 in the trial balance.
j. Gas, Electricity, and Water Expense, with a balance of $24,150, was omitted from the trial balance.
Instructions -
1. Prepare a corrected unadjusted trial balance as of August 31, 2019.
2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.