Reference no: EM131138622
The trial balance of the Sterling Company shown below does not balance.
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Your review of the ledger reveals that each account has a normal balance. You also discover the following errors (shown on page 85).
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100.
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $6,960, respectively.
3. A debit posting to Salaries Expense of $200 was omitted.
4. A $1,000 cash drawing by the owner was debited to M. Sterling, Capital for $1,000 and credited to Cash for $1,000.
5. A $520 purchase of supplies on account was debited to Equipment for $520 and credited to Cash for $520.
6. A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45.
7. A collection from a customer for $210 was debited to Cash for $210 and credited to Accounts Payable for $210.
Instructions
Prepare a correct trial balance. Note that the chart of accounts includes the following: M. Sterling, Drawing; and Supplies. (Hint: It helps to prepare the correct journal entry for the transaction described and compare it to the mistakemade.)