Reference no: EM13532937

This trial balance of Lagerstrom Company does not balance.

LAGERSTROM COMPANY  Trial Balance  May 31, 2012
	Debit	Credit
Cash	$6,340
Accounts Receivable		$2,750
Prepaid Insurance	700
Equipment	8,000
Accounts Payable		4100
Income Taxes Payable	850
Common Stock		5,700
Retained Earnings		6,000
Service Revenue	7,690
Salaries and Wages Expense	4,200
Advertising Expense		1100
Income Tax Expense	900
	$28,680	$19,650

Your review of the ledger reveals that each account has a normal balance. You also discover the following errors.

1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Income 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 $7,960, respectively.

3. A debit posting to Salaries and Wages Expense of $500 was omitted.

4. A $600 cash dividend was debited to Common Stock for $600 and credited to Cash for $600.

5. A $350 purchase of supplies on account was debited to Equipment for $350 and credited to Cash for $350.

6. A cash payment of $490 for advertising was debited to Advertising Expense for $49 and credited to Cash for $49.

7. A collection from a customer for $240 was debited to Cash for $240 and credited to Accounts Payable for $240.

Instructions

Prepare the correct trial balance, assuming all accounts have normal balances. (Note:The chart of accounts also includes the following: Dividends and Supplies.)