Question

MARTINEZ PEREZ, CONSULTING ENGINEER TRIAL BALANCE DECEMBER 31, 2017 Debit $29,500 56,400 Credit Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Notes Payable Owner's Capital Service Revenue Rent Expense (13 months of rent) Salaries and Wages Expense Utilities Expenses Office Expense Totals $718 1,730 1,050 33,800 8,450 7,200 35,342 112,964 9,334 30,360 1,750 750 $164,674 $164,674 1. Fees received in advance from clients $6,010, which were recorded as revenue 2. Services performed for clients that were not recorded by December 31, $5,145 3. Bad debt expense for the year is $1,294 4. Insurance expired during the year $471 5. Equipment is being depreciated at 10% per year 6, Martinez Perez gave the bank a 90-day, 10% note for $7,200 on December 1, 2017. 7. Rent of the building is $718 per month. The rent for 2017 has been paid, as has that for January 2018, and recorded as Rent Expense 8. Office salaries and wages earned but unpaid December 31, 2017, $2,292

Answer 1

Answer

• All the red boxes with incorrect answers are because of mistake committed in Statement of Owner’s Capital.
• Owner’s Capital, Dec 31 = Owner’s Capital Jan 1 + Net Income – Owner’s Drawings

= 52442 + 63126 – 17100

= $ 98,468 [not $ 46026]

• Hence, enter $ 98,468 in place of wrong answer ($ 46026)
• Correcting the figure will make the whole Statement of Owner’s Capital correct and without any mistake.
• Enter the same ending balance in Balance Sheet’s Owners’ capital answer box $ 98,468
• This will make “Total Liabilities & Owner’s Equity” equal to $ 114,030 [$ 15562 liabilities + 98468 capital balance]