Hunter Environmental Consulting prepared its unadjusted trial balance. Suppose Lisa Hunter made an error: She listed the Capital balance of $250,000 as a debit rather than a credit by mistake.

Compute the incorrect trial balance totals for debits and credits. 

Show how to correct this error:

• Search the journal for the amount of the difference. For example, suppose the total credits on Hunter Environmental Consulting’s trial balance equal $307,000 and total debits equal $306,000. A $1,000 transaction may have been posted incorrectly to the ledger by omitting the debit entry. Search the journal for a $1,000 transaction and check its posting to the ledger.

• Divide the difference between total debits and total credits by 2. A debit treated as a credit, or vice versa, doubles the amount of error. Suppose the accountant paid $1,000 cash for the utilities expenses. This transaction was recorded correctly in the journal but was posted as a debit to Cash and a debit to Utilities Expense. Thus, $2,000 appears on the debit side of the trial balance, and there is nothing on the credit side relating to this transaction. The out-of-balance amount is $2,000, and dividing by 2 reveals that the relevant transaction may have had a value of $1,000. Search the journal for a $1,000 transaction and check the posting to the ledger.

• Divide the out-of-balance amount by 9. If the result is evenly divisible by 9, the error may be a slide, which is adding or deleting one or several zeros in a figure (e.g., writing $61 as $610), or a transposition (e.g., treating $61 as $16). Suppose the accountant listed the $6,000 balance in Lisa Hunter, Withdrawals as $60,000 on the trial balance—a slide-type error. Total debits would differ from total credits by $54,000 (i.e., $60,000 - $6,000 = $54,000). Dividing $54,000 by 9 yields $6,000, the correct amount of the withdrawals. Trace this amount through the ledger until you reach the Lisa Hunter, Withdrawals account with a balance of $6,000. Dividing by 9 can give the correct transaction amount for a slide but not for a transposition.

Transcribed Image Text:

Account Number 1100 1200 1400 1900 2100 3000 3100 4000 5100 5200 5300 HUNTER ENVIRONMENTAL CONSULTING Unadjusted Trial Balance April 30, 2022 Account Title Cash Accounts receivable Office supplies Land Accounts payable Lisa Hunter, capital Lisa Hunter, withdrawals Service revenue Rent expense Salaries expense Utilities expense Total Debit $172,000 10,000 7,000 100,000 6,000 4,000 6,500 1,500 $307,000 Credit $ 2,000 250,000 55,000 $307,000