The trial balance of the Sterling Company shown below does not balance. Your review of the ledger

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The trial balance of the Sterling Company shown below does not balance.

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Your review of the ledger reveals that each account has a normal balance. You also discover the following errors (shown on page 85).1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property 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 $6,960, respectively.3. A debit posting to Salaries Expense of $200 was omitted.4. A $1,000 cash drawing by the owner was debited to M. Sterling, Capital for $1,000 and credited to Cash for $1,000.5. A $520 purchase of supplies on account was debited to Equipment for $520 and credited to Cash for $520.6. A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45.7. A collection from a customer for $210 was debited to Cash for $210 and credited to Accounts Payable for $210.InstructionsPrepare a correct trial balance. Note that the chart of accounts includes the following: M. Sterling, Drawing; and Supplies. (Hint: It helps to prepare the correct journal entry for the transaction described and compare it to the mistakemade.)

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Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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