Question

The following trial balance of Bridgeport Co. does not balance.

BRIDGEPORT CO. TRIAL BALANCE JUNE 30, 2017
		Debit			Credit
Cash					$3,339
Accounts Receivable		$3,700
Supplies		1,269
Equipment		4,269
Accounts Payable					3,135
Unearned Service Revenue		1,669
Common Stock					6,469
Retained Earnings					3,469
Service Revenue					2,849
Salaries and Wages Expense		3,869
Office Expense		1,409
Totals		$16,185			$19,261

Each of the listed accounts should have a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors.

1. Cash received from a customer on account was debited for $570, and Accounts Receivable was credited for the same amount. The actual collection was for $750.

2. The purchase of a computer printer on account for $969 was recorded as a debit to Supplies for $969 and a credit to Accounts Payable for $969.

3. Services were performed on account for a client for $890. Accounts Receivable was debited for $890 and Service Revenue was credited for $89.

4. A payment of $534 for telephone charges was recorded as a debit to Office Expense for $534 and a debit to Cash for $534.

5. When the Unearned Service Revenue account was reviewed, it was found that service revenue amounting to $794 was performed prior to June 30 (related to Unearned Service Revenue).

6. A debit posting to Salaries and Wages Expense of $1,139 was omitted.

7. A payment on account for $206 was credited to Cash for $206 and credited to Accounts Payable for $260.

8. A dividend of $1,044 was debited to Salaries and Wages Expense for $1,044 and credited to Cash for $1,044. Prepare a correct trial balance.

Answer 1

Bridgeport Co.

Trial Balance

June 30,2017 (amount in $)

Particulars	Debit	Credit
Cash (3339+180-534-534)	2451
Accounts Receivable (3700-180)	3520
Supplies (1269-969)	300
Equipment (4269 +969)	5238
Accounts Payable (3135-206-265)		2669
Unearned Service Revenue (1669-794)		875
Common stock		6469
Retained Earnings (3469-1044)		2425
Service Revenue (2849 + 794+ 801)		4444
Salaries and wages (3869 -1044 + 1139)	3964
Office expenses	1409
Totals	16882	16882

Tutorial Notes (in response to S.no. in question) :

1. The difference of amount $180 was not recorded due to error of commission where separate and lesser amount was recorded. Now, cash account should be debited and accounts receivable should be credited by $180.
2. Purchase of computer printer shall be debited to equipment as an asset correctly. To correct the entry, supplies i.e. purchase has been credited and equipment has been debited.
3. Service revenue was only recorded for $89 instead of $890. Hence, the difference of 801 has been now recorded as service revenue.
4. The cash has been deducted twice for $534 due to error made as cash was debited on payment of expenses which resulted in twice deduction now.
5. Performance of service increases the service revenue by $794 and decreases the unearned service revenue by $794.
6. Only salaries and wages account has been debited by $1139 as it was omitted.
7. Both $206 and $260 has been debited to accounts payable to reflect the correction as of now.
8. To correct this wrong entry, retained earning account is now debited and salaries and wages account is credited by $1044.