This trial balance of Saginaw Company does not balance.

Your review of the ledger reveals that each account has a normal balance. You also discover the following errors:
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated \(\$ 100\).
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were \(\$ 2,570\) and \(\$ 6,960\), respectively.
3. A debit posting to Salaries Expense of \(\$ 200\) was omitted.
4. A \(\$ 700\) cash dividend was debited to Common Stock for \(\$ 700\) and credited to Cash for \(\$ 700\).
5. A \(\$ 420\) purchase of supplies on account was debited to Equipment for \(\$ 420\) and credited to Cash for \(\$ 420\).
6. A cash payment of \(\$ 250\) for advertising was debited to Advertising Expense for \(\$ 25\) and credited to Cash for \(\$ 25\).
7. A collection from a customer for \(\$ 210\) was debited to Cash for \(\$ 210\) and credited to Accounts Payable for \(\$ 210\).
\section*{Instructions}
Prepare the correct trial balance. [Note: The chart of accounts also includes the following: Dividends, Supplies, and Supplies Expense.]

Transcribed Image Text:

SAGINAW COMPANY Trial Balance May 31, 1998 Debit Credit Cash Accounts Receivable $ 5,850 $ 2,750 Prepaid Insurance 700 Equipment 8,000 Accounts Payable 4,500 Property Taxes Payable 560 Common Stock 5,700 Retained Earnings 6,000 Service Revenue 6,690 Salaries Expense 4,200 Advertising Expense 1,100 Property Tax Expense 800 $26,800 $20,050