Alpaca Company presented the following unadjusted trial balance. As you can see, the trial balance is not
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Question:
Alpaca Company presented the following unadjusted trial balance. As you can see, the trial balance is not balanced since the former accountant made several errors.
ALPACA CORPORATION | ||
TRIAL BALANCE | ||
JAN 31, 2020 | ||
DEBIT | CREDIT | |
Cash | $ 10,000 | |
Accounts Receivable | 80,000 | |
Equipment | 120,000 | |
Accounts Payable | $ 48,000 | |
Wages Payable | 0 | |
Capital, Moose | 123,200 | |
Service Revenues | 86,000 | |
Wages Expense | 16,200 | |
Rent Expense | 14,000 | |
Insurance Expense | 12,000 | |
Utilities Expense | 3,000 | |
TOTAL | $ 255,200 | $ 257,200 |
After reviewing the financial records, you found the following four errors:
- Cash revenues of $10,000 had completely been omitted. They had not been recorded at all.
- A customer had paid cash of $20,000 for accounts receivable. The previous accountant, erroneously, debited accounts receivable $20,000 and credited cash $20,000.
- Accrued unrecorded wages of $3,000.
- An entry for rent was correctly recorded. However, when the accountant posted the amount on the ledger, the posted amount was $200 instead of $2,200.
REQUIRED:
- Prepare four properly formatted journal entries to correct the above four errors
- Prepare a corrected and properly formatted trial balance as at Jan 31, 2020
- Please explain why you come up with those number, be specific.
- Remember to respond in essay format (except when recording journal entries or showing calculations. N.B: For parts that ask for the journal entry, it is easier to simply write the journal entry in journal entry format rather than trying to explain a journal entry in essay format.
Related Book For
Accounting
ISBN: 978-1337899451
27th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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