Reference no: EM132679504

Problem - Corrected trial balance

Imperial Carpet has the following unadjusted trial balance as of March 31, 2012.

Imperial Carpet Unadjusted Trial Balance March 31, 2012
	Debit Balances	Credit Balances
Cash	38,200
Accounts Receivable	81,000
Supplies	16,690
Prepaid Insurance	3,600
Equipment	392,000
Notes Payable		200,000
Accounts Payable		54,000
Capital Stock		95,000
Retained Earnings		159,300
Dividends	116,000
Fees Earned		858,900
Wages Expense	490,000
Rent Expense	112,600
Advertising Expense	50,400
Miscellaneous Expense	10,200
	1,310,690	1,367,200

The debit and credit totals are not equal as a result of the following errors:

a. The balance of cash was understated by $12,000.

b. A cash receipt of $13,900 was posted as a debit to Cash of $19,300.

c. A debit of $15,000 to Accounts Receivable was not posted.

d. A return of $90 of defective supplies was erroneously posted as a $900 credit to Supplies.

e. An insurance policy acquired at a cost of $2,500 was posted as a credit to Prepaid Insurance.

f. The balance of Notes Payable was understated by $35,200.

g. A credit of $7,600 in Accounts Payable was overlooked when determining the balance of the account.

h. A debit of $10,000 for dividends was posted as a credit to Retained Earnings.

i. The balance of $116,200 in Rent Expense was entered as $112,600 in the trial balance.

j. Gas, Electricity, and Water Expense, with a balance of $48,300 was omitted from the trial balance.

Instructions -

1. Prepare a corrected unadjusted trial balance as of March 31, 2012.

2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.