1460T_c03.qxd11/18/0508:34 am Page108 EQA 108 Chapter 3 The Accounting Information System WATTEAU CO. TRIAL BALANCE JUNE30,2007 Debit Credit Cash $2,870 Accounts Receivable $3,231 Supplies 800 Equipment 3,800 Accounts Payable 2,666 Unearned Service Revenue 1,200 Common Stock 6.000 Retained Earnings 3.000 Service Revenue 2.380 Wages Expense 3.400 Office Expense 940 S13,371 $16,916 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 $500 was recorded as a debit to Supplies for $500 and a credit to Accounts Payable for $500. 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 $65 for telephone charges was recorded as a debit to Office Expense for $65 and a debit to Cash for $65. 5.When the Unearned Service Revenue account was reviewed,it was found that $325 of the balance ⊕ was earned prior to June 30. 6. A debit posting to Wages Expense of $670 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 $575 was debited to Wages Expense for $575 and credited to Cash for $575 Instructions Prepare a correct trial balance.(Note:It may be necessary to add one or more accounts to the trial balance.) (L05) E3-5 (Adjusting Entries)The ledger of Duggan Rental Agency on March 31 of the current year in- cludes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance $3,600 Supplies 2,800 Equipment 25,000 Accumulated Depreciation-Equipment $8,400 Notes Payable 20,000 Unearned Rent Revenue 9,300 Rent Revenue 60,000 Interest Expense -0- Wage Expense 14.000 An analysis of the accounts shows the following 1. The equipment depreciates $250 per month. 2. One-third of the unearned rent was earned during the quarter. 3.Interest of $500 is accrued on the notes payable. 4.Supplies on hand total $850. 5.Insurance expires at the rate of $300 per month. Instructions Prepare the adjusting entries at March 31,assuming that adjusting entries are made quarterly.Additional accounts are:Depreciation Expense;Insurance Expense;Interest Payable;and Supplies Expense.(Omit explanations.)108 • Chapter 3 The Accounting Information System 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 $500 was recorded as a debit to Supplies for $500 and a credit to Accounts Payable for $500. 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 $65 for telephone charges was recorded as a debit to Office Expense for $65 and a debit to Cash for $65. 5. When the Unearned Service Revenue account was reviewed, it was found that $325 of the balance was earned prior to June 30. 6. A debit posting to Wages Expense of $670 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 $575 was debited to Wages Expense for $575 and credited to Cash for $575. Instructions Prepare a correct trial balance. (Note: It may be necessary to add one or more accounts to the trial balance.) E3-5 (Adjusting Entries) The ledger of Duggan Rental Agency on March 31 of the current year in￾cludes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance $ 3,600 Supplies 2,800 Equipment 25,000 Accumulated Depreciation—Equipment $ 8,400 Notes Payable 20,000 Unearned Rent Revenue 9,300 Rent Revenue 60,000 Interest Expense –0– Wage Expense 14,000 An analysis of the accounts shows the following. 1. The equipment depreciates $250 per month. 2. One-third of the unearned rent was earned during the quarter. 3. Interest of $500 is accrued on the notes payable. 4. Supplies on hand total $850. 5. Insurance expires at the rate of $300 per month. Instructions Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expense; Interest Payable; and Supplies Expense. (Omit explanations.) WATTEAU CO. TRIAL BALANCE JUNE 30, 2007 Debit Credit Cash $ 2,870 Accounts Receivable $ 3,231 Supplies 800 Equipment 3,800 Accounts Payable 2,666 Unearned Service Revenue 1,200 Common Stock 6,000 Retained Earnings 3,000 Service Revenue 2,380 Wages Expense 3,400 Office Expense 940 $13,371 $16,916 (L0 5) 1460T_c03.qxd 11/18/05 08:34 am Page 108