91Ó°ÊÓ

E3-2 (L02) (Corrected Trial Balance) The following trial balance of Wanda Landowska Company does not balance. Yourreview of the ledger reveals the following. (a) Each account had a normal balance. (b) The debit footings in Prepaid Insurance,Accounts Payable, and Property Tax Expense were each understated \(100. (c) A transposition error was made in AccountsReceivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are \)2,750 and \(6,690,respectively. (d) A debit posting to Advertising Expense of \)300 was omitted. (e) A \(1,500 cash drawing by the owner was debited to Owner’s Capital and credited to Cash.

WANDA LANDOWSKA COMPANYTRIAL BALANCEAPRIL 30, 2017

Debit (\)) Credit (\()Cash \) 4,800Accounts Receivable 2,570Prepaid Insurance 700Equipment \( 8,000Accounts Payable 4,500Property Taxes Payable 560Owner’s Capital 11,200Service Revenue 6,960Salaries and Wages Expense 4,200Advertising Expense 1,100Property Tax Expense 800

Total \)20,890 $24,500

Prepare a correct trial balance.

Step by step solution

01

Step 1:Meaning of Trial Balance

The trial balanceis aworksheet in which all the ledger balances are recordedand divided into debit and credit columns. Debit and credit totals should be equal at the end of the reporting period.

02

Preparation of trial balance

Wanda Landowska Company Trail balance April 30, 2017
Particulars	Debit $	Credit $
Cash	4,800
Accounts receivable	2750
Prepaid insurance($700 + $100)	800
Equipment	8,000
Owners drawings	1500
Salaries and wage expenses	4200
Advertising expenses($1100 + $300)	1400
Property tax expense ($800 + $100)	$900
Accounts payable ($4500 - $100)		4400
Property tax payable		560
Owners capital ($11,200+$1,500)		12700
Service revenue		6690
Total	24,350	24,350

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