Financial Accounting: An Integrated Statements Approach, 2nd Edition

“yes,” the amount by which the trial balance totals would differ; and (c) whether the debit or

credit column of the trial balance would have the larger total. Answers should be presented in

the following form, with error (1) given as an example:

(a) (b) (c)

Error Out of Balance Difference Larger Total

1. yes $1,250 debit

How many errors can you find in the following trial balance? All accounts have normal balances.

On January 31, the end of the current year, the following data were accumulated to assist the

accountant in preparing the adjusting entries for Edsel Realty:

a. The supplies account balance on January 31 is $2,750. The supplies on hand on January 31

are $645.

b. The unearned rent account balance on January 31 is $9,450, representing the receipt of an

advance payment on January 1 of three months’ rent from tenants.

c. Wages accrued but not paid at January 31 are $2,150.

d. Fees accrued but unbilled at January 31 are $13,340.

e. Depreciation of office equipment for the year is $2,900.

Journalize the adjusting entries required at January 31.

Ithaca Services Co. offers cleaning services to business clients. The trial balance for Ithaca

Services Co. before adjustments is shown on the next page.

192 Chapter 4 Accounting Information Systems

Exercise 4-24

Errors in trial balance

Goals3, 4

Exercise 4-25

Adjusting entries

Goals3, 4

Dinero Co.

Trial Balance

For the Month Ending January 31, 2006

Debit Credit

Balances Balances

Cash 7,500

Accounts Receivable 16,400

Prepaid Insurance 3,600

Equipment 50,000

Accounts Payable 1,850

Salaries Payable 1,250

Capital Stock 5,000

Retained Earnings 38,200

Dividends 6,000

Service Revenue 78,700

Salary Expense 32,810

Advertising Expense 7,200

Miscellaneous Expense 1,490

152,750 152,750

Exercise 4-26

Adjusting entries

Goals3, 4