Exercise 34 The following trial balance of Sheffield Co does

Exercise 3-4 The following trial balance of Sheffield Co. does not balance SHEFFIELD CO TRIAL BALANCE JUNE 30, 2017 Debit Credit Cash Accounts Receivable Supplies Equipment Accounts Payable Unearned Service Revenue Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Office Expense Totals $3,227 $3,588 1,157 4,157 3,023 1,557 6,357 3,357 2,737 3,757 1,297 $15,513 $18,701 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 $857 was recorded as a debit to Supplies for $857 and a credit to Accounts Payable for $857. 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 $422 for telephone charges was recorded as a debit to Office Expense for $422 and a debit to Cash for $422 5. When the Unearned Service Revenue account was reviewed, it was found that service revenue amounting to $682 was performed prior to June 30 (related to Unearned Service Revenue) 6. A debit posting to Salaries and Wages Expense of $1,027 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 $932 was debited to Salaries and Wages Expense for $932 and credited to Cash for $932.

Solution

SHEFFIELD CO.

TRIAL BALANCE

JUNE 30, 2017

1)Cash was less debited by 750-570 =180 and so as accounts receivable are less credited by 180

3)Service revenue is less credited by 890-89=801

4)cash is Debited (increased) rather than credit (decrease as it is a payment) so to remove the wrong effect of debit ,cash is decreased by 422 ..Also payment is made for expense so cash will decrease by 422 So total decrease in cash will be [422+422= -844]

7)Accounts payable credited(increased) instead of debit(decrease) .so to remove the effect of credit accounts payable is decrease by 260 .and now the amount of actual decrease of accounts payable due to payment is 206 so it is subtracted from amount.

SHEFFIELD CO. TRIAL BALANCE JUNE 30, 2017
	Debit	credit
Cash [3227 +180-422-422]	2563
Receivable [3588-180]	3408
Supplies [[1157-857	300
Computer printer	857
Equipment	4157
Accounts payable [3023-260-206]		2557
Unearned revenue [1557-682]		875
common stock		6357
Retained earning		3357
Dividend	932
Service revenue [2737+801+682		4220
salaries and wage expense [3757+1027-932]	3852
Office expense [1297 -422]	875
Telephone expense	422
Total	17366	17366