Page 108 - Accounting Principles (A Business Perspective)

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13 Purchased USD 240 of supplies on account for use in December.
15 Collected cash from customers on account, USD 75,000.
20 Paid for customer entertainment, USD 450.

24 Collected an additional USD 6,000 from customers on account.
26 Paid for gasoline used in the trucks in December, USD 270.
28 Billed customers for services rendered, USD 79,500.
30 Paid for more December supplies, USD 12,000.
31 Paid December salaries, USD 15,300.
31 Paid a USD 4,000 cash dividend. (The Dividends account is No. 320.)
a. Open three-column general ledger accounts for each of the accounts in the trial balance under the date of

2010 December 1. Place the word Balance in the explanation space of each account. Also open an account for
Dividends, No. 320.
b. Prepare entries in the general journal for the preceding transactions for December 2010.
c. Post the journal entries to three-column general ledger accounts.
d. Prepare a trial balance as of 2010 December 31.
Problem E Marc Miller prepared the following trial balance from the ledger of the Quick-Fix TV Repair
Company. The trial balance did not balance.
QUICK-FIX REPAIR COMPANY
Trial Balance
2010 December 31
Acct.
No. Account Title Debits Credits
100 Cash $ 69,200
103 Accounts Receivable 60,800
160 Office Furniture 120,000
172 Office Equipment 48,000
200 Accounts Payable $ 32,400
300 Capital Stock 180,000
310 Retained Earnings 80,000
320 Dividends 28,800
400 Service Revenue 360,000
507 Salaries Expense 280,000
515 Rent Expense 40,000
568 Miscellaneous Expense 7,200
$654,000 $652,400
The difference in totals in the trial balance caused Miller to carefully examine the company's accounting records.
In searching back through the accounting records, Miller found that the following errors had been made:

• One entire entry that included a USD 10,000 debit to Cash and a USD 10,000 credit to Accounts Receivable
was never posted.
• In computing the balance of the Accounts Payable account, a credit of USD 3,200 was omitted from the
computation.
• In preparing the trial balance, the Retained Earnings account balance was shown as USD 80,000. The
ledger account has the balance at its correct amount of USD 83,200.

Accounting Principles: A Business Perspective 109 A Global Text