The following trial balance of Messed Up Ltd., at the end of its first year of operations, May 31, 2015, does not balance:

Each of the listed accounts has a normal balance per the general ledger. However, each account may not have been listed in the appropriate debit or credit column, or may not belong in the trial balance at all. An examination of the general ledger and general journal reveals the following errors:
1. Prepaid Insurance, Accounts Payable, and Income Tax Expense were each understated by $100.
2. A transposition (reversal of digits) error was made in Service Revenue. Based on the posting made, the correct balance was $14,259.
3. A $750 dividend paid to shareholders was debited to Salaries Expense and credited to Cash.
4. A $120 collection on account was recorded as a debit to Accounts Payable and a credit to Accounts Receivable.
5. A $2,000 bank loan was signed in exchange for the purchase of equipment. The transaction was neither journalized nor posted.
Instructions
Prepare the correct trial balance.

Transcribed Image Text:

Debit Credit $ 2,997 2,630 9,200 Accounts receivable Equipment Accumulated depreciation-equipment Accounts payable Common shares Retained earnings, May 31, 2015 Service revenue Salaries expense Advertising expense Depreciation expense Insurance expense Income tax expense 4,600 4,250 $ 2,147 14,529 8,150 1,132 2,100 2 $27,877 $29,058