E2-38. (Learning Objectives 1, 4: Analyzing transactions; using a trial balance) The trial balance of Circle 360, Inc., at October 31, 20X6, does not balance.

Requirements 1. How much out of balance is the trial balance? Determine the out-of-balance amount. The error lies in the Accounts Receivable account. Add the out-of-balance amount to, or subtract it from, Accounts Receivable to determine the correct balance of Accounts Receivable.
2. After correcting Accounts receivable, advise the top management of Circle 360, Inc., on the company’s

a. total assets

b. total liabilities

c. net income or net loss for October

Transcribed Image Text:

Cash............. Accounts receivable............ Land............. Accounts payable. Note payable $ 4,200 Share capital........... $ 20,800 6,900 Retained earnings... 7,900 35,100 Service revenue. 9,100 6,200 Salary expense.... 3,000 5,100 Advertising expense.. 1,100