Reference no: EM132571589

Question - The following trial balance of Baro Company owned by Brook as of DECEMBER 2018 does not balances because of many reasons

Account description Debit Credit

Cash 3752

Account Receivable 5683

Supplies 1457

Prepaid Insurance 100

Equipment 14600

Notes Payable 13000

Account payable 2960

Brook's capital 10042

Brook's drawing 3500

Sales 38200

Salary expense 21400

Rent expense 4500

Advertising expense 200

Utility expense 900

Total 56092 56092

For trial balance in balance

a. The balance of cash was over stated by $1000.

b. The cash receipts of $210 was posted as debit of cash of $120

c. Debit of $2000 for withdrawal by owner was posted credit to capital account

d. The balance of $1200 advertising expense was entered as $ 200 in the trial balance

e. A debit of $ 450 to account receivable account was not posted but currently to subsidiary ledger account .

f. A return of $ 310 of defective supplies was erroneously posted was $130 credit to supply.

g. The balance of notes payable was over stated $3000

h. An insurance policy acquire at cost of $200 was posted as a credit to prepaid insurance.

i. Miscellanies expense with a balance of a $1060 was omitted from trial balance.

j. A credit of $710 in account payable is over looked during general ledger account and subsidiary ledger account and subsidiary ledger customer account

k. A debit of $650 to account receivable was posted correctly but not posted to subsidiary ledger customer account.

Additional information's for adjusted entries

a. Inventory of supplies of December 31, 2018 shows $277

b. Insurance expired for the period of 2018 is $350.

c. Doubtful account for the period is 2% the balance of account receivable

Required -

1. Prepare an adjusted trial as of December 31, 2018 in interim financial report.

2. Record adjusted entries for the period and determine the balanced of cash account.

3. Prepare financial report income statement, balance sheet as December31, 2018.