The Following Trial Balance Was Prepared from the General Ledger

question 137

Essay

The following trial balance was prepared from the general ledger of Hal's Auto Repair.
$\begin{array}{c}\text {HAL'S AUTO REPAIR}\\\text {Trial Balance}\\\text {October 31}\\\begin{array}{|l|r|r|}\hline\text { Account } & \text { Debit }&\text { Credit }\\\hline \text { Cash } & \$ 975 \\\hline \text { Accounts receivable } & 3,800 \\\hline \text { Supplies } & 500 \\\hline \text { Repair equipment } & 13,000 \\\hline \text { Office equipment } & 6,600 \\\hline \text { Accounts payable } & & \$ 4,510 \\\hline \text { Common stock } & & 10,000 \\\hline \text { Retained earnings } & & 13,000 \\\hline \text { Dividends } & 4,200 & \\\hline \text { Repair fees earned } & & 10,875 \\\hline \text { Supplies expense } & \underline{8,600} & \\\hline \text { Totals } & \$ 37.675 & \$ 38,385 \\\hline \end{array}\end{array}$

Since 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 Common Stock 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 Dividends account was posted as a credit.
5.Office equipment purchased for $800 was posted to the Repair Equipment account.
6.One entire entry was not posted to the general ledger.The transaction involved the receipt
of $125 cash at the time repair services were performed.
Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.

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Definitions:

Labor Time

The amount of time workers spend producing goods or delivering services.

Linear Production

A production process that exhibits constant rates of input substitution and output, often depicted as a straight line in a graph.

Economic Models

Simplified representations of complex economic processes used to predict future economic activity or to understand economic dynamics.

Assumptions

Premises or conditions that are accepted as true without proof, used as a basis for reasoning or conduct in theories and models.