Following are the general ledger account balances of Balcones Company, Inc. (BCI), as of September 30, 2009:
Cash............................................................ $ 50,000
Accounts Receivable.................................. 300,000
Inventory.................................................... 250,000
Equipment.................................................. 450,000
Accumulated Depreciation-Equipment 110,000
Accounts Payable....................................... 350,000
Income Taxes Payable................................ 50,000
Common Stock........................................... 95,000
Retained Earnings...................................... 100,000
Sales Revenue............................................ 600,000
Operating Expenses................................... 255,000
Required:
(a) Prepare a trial balance for BCI as of September 30, 2009.
(b) Even if a trial balance is in balance, one or more general ledger accounts of a business may contain errors. Provide three examples of accounting errors that would not cause a business’s trial balance to be out-of-balance.
(c) What steps could the management of BCI take to help ensure that its accounts are error free? Write a brief memo to the company’s management listing your recommendations.