27E - Horngren'S Financial And Managerial Accounting

Question

Question: Correcting errors in a trial balance 

The following trial balance of Joy McDowell Tutoring Service as of May 31, 2018, does not balance.

 Account Title Office Supplies Cash Debit Credit Accounts Receivable Computer Equipment Accounts Payable Utilities Payable Common Stock Dividends Service Revenue Salaries Expense Utilities Expense Rent Expense Total Balance \( 33,100 11,600 \) 11,100 9,600 800 \( 2,800 \) 35,000 1,900 800 700 2,000 600 15,800 10,400

Investigation of the accounting records reveals that the bookkeeper: 

a. Recorded a \(400 cash revenue transaction by debiting Accounts Receivable. The credit entry was correct. 

b. Posted a \)2,000 credit to Accounts Payable as \(200. 

c. Did not record Utilities Expense or the related Utilities Payable in the amount of \)300. 

d. Understated Common Stock by $100. 

Prepare the corrected trial balance as of May 31, 2018, complete with a heading; journal entries are not required.

Step-by-Step Solution

Answer

The dividends are the profit that is distributed to the owners of the business and the required corrected trial balance is prepared in step 2.

Step-by-Step Solution Step 1 Definition of Dividends

The dividends are defined as the part of profits that are distributed among the shareholders or the owners of the business.

Step 2 Preparation of corrected Trial Balance

Joy McDowell Tutoring Service
Corrected Trial Balance
May 31, 2018
Account Title	Debit ($)	Credit ($)
Cash	$3,200
Accounts Receivable	$1,600
Office Supplies	$600
Computer Equipment	$15,800
Accounts Payable		$12,900
Utilities Payable		$1,100
Common Stock		$11,700
Dividends	$10,400
Service Revenue		$9,600
Salaries Expense	$1,900
Rent Expense	$800
Utilities Expense	$1,000
Total	$35,300	$35,300