The Following Trial Balance Is Prepared from the General Ledger

question 236

Essay

The following trial balance is prepared from the general ledger of HG's Auto Maintenance.
HG'S AUTO MAINTENANCE
Trial Balance October 31
$\begin{array}{l|r|r}\hline & \text { Debit } & \text { Credit } \\\hline \text { Cash } & \$ 1,975 & \\\hline \text { Accounts receivable } & 2,800 & \\\hline \text { Supplies } & 500 & \\\hline \text { Shop equipment } & 13,000 & \\\hline \text { Office equipment } & 6,600 & \\\hline \text { Accounts payable } & & \$ 4,510 \\\hline \text { Hal Grifin, Capital } & & 22,000 \\\hline \text { Hal Griffin, Withdrawals } & 4,200 & \\\hline \text { Repair fees earned } & & 11,875 \\\hline \text { Supplies expense } & 8,600 & \\\hline \text { Totals } & \$ 37,675 & \$ 38,385 \\\hline\end{array}$
Because the trial balance did not balance, you decided to examine the accounting records. You found that the following errors had been made:
1. A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit to Accounts Payable.
2. An investment of $500 cash by the owner was debited to Hal Griffin, Capital and credited to Cash.
3. In computing the balance of the Accounts Receivable account, a debit of $600 was omitted from the computation.
4. One debit of $300 to the Hal Griffin, Withdrawals account was posted as a credit.
5. Office equipment purchased for $800 was posted to the Shop Equipment account.
6. One entire entry was not posted to the general ledger. The transaction involved the receipt of $125 cash for repair services performed for cash.
Prepare a corrected trial balance for the HG's Auto Maintenance as of October 31.

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Definitions:

Comparability

A quality of accounting information that allows users to analyze and compare financial data from different periods and entities in order to make informed decisions.

Capital Raised

The total amount of funds collected by a company from investors or financial markets, often used for business operations, expansion, or paying off debt.

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a predetermined price within a specified time frame.

Diluted Earnings

Earnings per share calculated under the assumption that all convertible securities have been converted into common stock, providing a "worst case" scenario perspective on earnings per share.