After Preparing an (Unadjusted) Trial Balance at Year-End, R Would the Error Cause the Trial Balance to Be Out

question 78

Essay

After preparing an (unadjusted) trial balance at year-end, R. Chang of Chang Window Company, Inc. discovered the following errors:
1. Cash payment of the $225 telephone bill for December was recorded twice.
2. Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes Payable for $1,000.
3. A $900 cash dividend paid to the owner was recorded to the correct accounts as $90.
4. An additional investment of $5,000 cash by the owner was recorded as a debit to Common Stock and a credit to Cash.
5. A credit purchase of office equipment for $1,800 was recorded as a debit to the Office Equipment account with no offsetting credit entry.
Using the form below, indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column. Would the error cause the trial balance to be out of balance? $\begin{array}{c}\begin{array}{lll} \text {Error }\\1.\\2.\\3.\\4.\\5.\end{array}\begin{array}{lll}\text { Yes }\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\end{array}\begin{array}{lll}\text { No }\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\underline{\quad\quad\quad\quad}\\\end{array}\end{array}$

Would the error cause the trial balance to be out of balance?

Describe how intra-entity gross profit on a transfer of inventory is treated on a consolidation worksheet.

Comprehend the adjustments to depreciation expense within the consolidation process for intra-entity transfers of a depreciable asset.

Discuss the effect of downstream transfers on the noncontrolling interest within consolidated financial statements.

Understand the reasons behind the frequent occurrence of intra-entity transfers in business combinations.

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Definitions:

Customers Served

A measure of how many clients or customers a business, organization, or service has provided for in a given period.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, keeping all other inputs constant.

Production Possibilities

The different combinations of goods and services that an economy can produce given its available resources and technology.

Average Product

A metric that measures output per unit of a variable input, calculated by dividing total production by the quantity of the variable input.