Question

The following trial balance of Wanda Landowska Company does not balance. Your review of the ledger reveals the following. (a) Each account had a normal balance. (b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100. (c) A transposition error was made in Accounts Receivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690, respectively. (d) A debit posting to Advertising Expense of $300 was omitted. (e) A $1,500 cash drawing by the owner was debited to Owner’s Capital and credited to Cash.

Answer 1

Debt Entries

Cash = 4800

Account Receivable = 2750

Prepaid Insurance = 800

Equipment = 8000

Owner's drawings = 1500

Salaries and wage expenses = 4200

Advertising Expense = 1400

Property tax Revenue = 900

Total Debt = 24350

Credit Entries

Account Payable = 4400

Property tax payable = 560

Owner's Capital = 12700

Service Revenue = 6690

Total Credit = 24350