Tom Brennan. CPA. was retained by 24/7 (able Inc. to prepare financial statements for April 2006. Brennan accumulated all the ledger balances per 24/7's records and found the following.

Tom Brennan reviewed the records and found the following errors.
1. Cash received from a customer on account was recorded as $870 instead of $780.
2. A payment of $65 for advertising expense was entered as a debit to Miscellaneous Expense $65 and a credit to Cash $65.
3. The first salary payment this month was for $1,900. which included $500 of salaries payable on March 31. The payment was recorded as a debit to Salaries Expense $1,900 and a credit to Cash $1,900. (No reversing entries were made on April I.)
4. The purchase on account of a printer costing $290 was recorded as a debit to Supplies and a credit to Accounts Payable for $290.
5. A cash payment of repair expense on equipment for $95 was recorded as a debit to Equipment $59 and a credit to Cash $59.
Instructions

(a) Prepare an analysis of each error showing (1) the incorrect entry. (2) the correct entry, and (3) the correcting entry. Items 4 and 5 occurred on April 30, 2006.

(b) Prepare a correct trial balance.

Transcribed Image Text:

24/7 CABLE INC. Trial Balance April 30, 2006 Debit Credit Cash $ 4.100 Accounts Receivable 3.200 Supplies Equipment 800 10,600 Unearned Revenue Accumulated Depreciation Accounts Payable Salaries Payable Common Stock Retained Earnings $ 1.350 2.100 500 890 10,000 2,900 Service Revenue 5.450 Salaries Expense 3.300 Advertising Expense 400 Miscellaneous Expense 290 Depreciation Expense 500 $23.190 $23.190